Alibaba’s Ma steps down amid uncertainty

Slowing economic growth in China pumped brakes on firm’s sales

Alibaba Group founder Jack Ma, who helped launch China’s online retailing boom, stepped down as chair of the world’s biggest e-commerce company Tuesday at a time when its fastchanging industry faces uncertainty amid a U.S.-Chinese tariff war.

Ma, one of China’s wealthiest and bestknown entrepreneurs, gave up his post on his 55th birthday as part of a succession announced a year ago. He will stay on as a member of the Alibaba Partnership, a 36-member group with the right to nominate a majority of the company’s board of directors.

Ma, a former English teacher, founded Alibaba in 1999 to connect Chinese exporters to American retailers.

The company has shifted focus to serving China’s growing consumer market and expanded into online banking, entertainment and cloud computing. Domestic businesses accounted for 66 per cent of its $16.7 billion in revenue in the quarter ending in June.

Chinese retailing faces uncertainty amid a tariff war that has raised the cost of U.S. imports.

Growth in online sales decelerated to 17.8 per cent in the first half of 2019 amid slowing Chinese economic growth, down from 2018’s full-year rate of 23.9 per cent.

Alibaba says its revenue rose 42 per cent over a year earlier in the quarter ending in June to $16.7 billion and profit rose 145 per cent to $3.1 billion. Still, that was off slightly from 2018’s full-year revenue growth of 51 per cent.

The total amount of goods sold across Alibaba’s e-commerce platforms rose 25 per cent last year to $853 billion. By comparison, the biggest U.S. e-commerce company, Amazon.com Inc., reported total sales of $277 billion.

Alibaba’s deputy chair, Joe Tsai, told reporters in May the company is “on the right side” of issues in U.S.-Chinese trade talks. Tsai said Alibaba stands to benefit from Beijing’s promise to increase imports and a growing consumer market.

The company’s $25-billion IPO on the New York Stock Exchange in September 2014 was the biggest to date by a Chinese company. The Hurun Report, which follows China’s wealth, estimates Ma’s fortune at $38 billion.

Ma’s successor as chair is CEO Daniel Zhang, a former accountant and 12-year veteran of Alibaba. He previously was president of its consumer-focused Tmall.com business unit.