One of China's best known corporate leaders, billionaire Jack Ma, will step down as CEO of Alibaba Group, the e-commerce empire he founded to tap the nation's enormous online shopping potential, passing the reins to "a younger, better equipped" generation.
Ma, a former tour guide and English teacher and self-styled "China's Forrest Gump", said he would name a successor by May 10, when he switches to the role of executive chairman. He said most of Alibaba's leaders "born in the 1960s" would also pass their leadership responsibilities to younger colleagues.
"As a founder CEO, stepping down ... is a difficult decision. It's not because I wanted to take things easy (though the job of Alibaba CEO is no easy task), it's because I see that Alibaba's young people have better, more brilliant, dreams than mine, and they are more capable of building a future that belongs to them," Ma wrote in an e-mail to employees. Reuters obtained the letter on Tuesday from a source close to Alibaba.
The shift is a significant one for Alibaba and follows moves announced last week to chop the group into more than two dozen smaller divisions ��� to give managers more flexibility. China's big Internet firms such as Baidu Inc and Tencent Holdings are under pressure from startups, and have restructured.
It also comes after a transformative deal Alibaba struck last year to buy back about half the stake in itself held by Yahoo Inc. Alibaba had long sought to buy back the shares to regain control over its own corporate destiny.
Yahoo paid around $1 billion for a 40 percent stake in Alibaba in 2005, but ties were strained and the U.S. group's shareholders last year agitated to unlock the value of Asian assets such as Alibaba.
In an interview with The New York Times, 48-year-old Ma acknowledged he was feeling the strain. "When I was 35, I was so energetic and fresh-thinking. I had nothing to worry about," he said, adding he would focus in his new role on broad strategic issues, corporate development and social responsibility.
"I will still be very active," he said. "It is impossible for me to retire."
Alibaba Group includes Alibaba.com, an online market for small businesses; Taobao, a consumer shopping site; and Alipay, an online payment platform.
The value of deals on Taobao Marketplace and Taobao Mall, China's largest e-commerce platforms, topped 1 trillion yuan ($161 billion) -- around 2 percent of China's GDP -- in January-November, reflecting the boom in a sector where 16 percent of China's 1.34 billion population shops online.
Alibaba's various online marketplaces boast at least 85 million registered users worldwide, trading in everything from imported almonds and precious jade to motorcycles and soft toys.
"The biggest challenge a new CEO faces is making sure the new business units can effectively coordinate among themselves," said Yang Xiao, a Beijing-based analyst with research firm Analysys International. "As they are supposed to be able to work independently, it remains to be seen how effective and authoritative the new CEO can be."
SMALL BUSINESS CHAMPION
Ma, reckoned to be worth $3.4 billion by Forbes late last year, built his e-commerce empire from scratch and has steered it through numerous bumps. Alibaba Group's likely Hong Kong listing is among the big IPOs bankers are preparing for late this year or early next year.
Ma's move is unlikely to affect listing plans, but may have an impact on valuations, industry sources said.
"Jack Ma may not be running the day-to-day activities, although he will still have an influence in where the company should be headed," Frederick Wong, executive director of Avant Capital Management (Hong Kong) Ltd, a hedge fund that invests in tech companies. "However, valuations for the IPO could be lower than previous expectations as it will depend on how effective the new CEO is in executing certain decisions."
Since its founding in 1999, Alibaba has grown into an enterprise spanning business-to-consumer (B2C) and consumer-to-consumer (C2C) trade, logistics, search and e-payment. Ma has more recently been looking to improve its platform rather than just boost the number of subscribers, a shift that's likely to see growth taper off and medium-term profitability dented.
Ma, lean and down-to-earth, founded the group on the principle of championing small businesses, the bedrock of China's economy, in the battle against industry giants.
"My inspiration came from the American movie Forrest Gump," he told an American audience in 2009. "Forrest Gump is not a smart guy, but he is focused. He's not talented, but he is very, very hard working, and he's very simple and opportunistic."
China's booming online market has proved hugely lucrative for Ma. Taobao, a late entrant to the C2C market, beat off eBay Inc in China in the late-2000s by offering free listing services for its sellers.
"EBay may be a shark in the ocean, but I'm a crocodile in the Yangtze River. If we fight in the ocean, we lose, but if we fight in the river, we win," Ma told Forbes magazine in 2005.
Ma's blend of gumption and brash hopefulness has made him a cult figure among local entrepreneurs, taxi drivers and other ordinary Chinese. Hundreds of small business owners turn up in Alibaba shirts to hear him speak at the "AliFest", an annual gathering of e-commerce fans and celebrity speakers akin to U.S. investor Warren Buffett's annual "Oracle of Omaha" events.
Ma, a dog lover and avid tea drinker, is known to put on fake multi-colored Mohawk wigs and kung-fu outfits at company parties, but he also has a more Machiavellian streak, willing to do battle with the likes of eBay and Yahoo.
"I always remind myself that I can't pretend. I'm not as good as other people say I am. Nor am I as bad as other people say I am," he once said in a text message to Hu Shuli, editor of prominent magazine Caixin Weekly.
(Writing by Ian Geoghegan; Editing by Alex Richardson)