Jack Ma urges Alibaba to trust market forces and innovation

By Jiahui Huang

According to an internal memo written to mark the company’s 25th anniversary, Alibaba Group co-founder Jack Ma said competition will make the company stronger and the e-commerce giant must trust the power of market forces and innovation.

“Many of Alibaba’s businesses face challenges and opportunities to be overtaken, but that is to be expected because no company can stay at the top of any industry forever,” Ma said in a letter to employees late Tuesday, seen by The Wall Street Journal.

Once a Wall Street darling and a dominant player in China’s e-commerce industry, the tech giant’s growth has slowed amid a weakening Chinese economy and muted consumer sentiment. Intensifying competition from domestic upstarts like PDD Holdings’ e-commerce platform Pinduoduo and ByteDance’s short-video app Douyin have also put pressure on Alibaba’s growth momentum.

“Only through competition can we become stronger and allow the industry to remain healthy,” Ma said.

The letter comes after Alibaba recently completed a three-year regulatory process in China.

Chinese regulators said in late August they had ended their monitoring and assessment of Alibaba after the company was fined for monopolistic practices in 2021. For the past three years, the company had been required to submit self-assessment compliance reports to market regulators.

Ma reiterated Alibaba’s ambition to be a company that will last 102 years. He appealed to Alibaba employees not to be tossed around by challenges and competition.

“We are Alibaba because we have idealistic beliefs, we believe in the future, we believe in the market. We believe that only a company that can create real value for society can operate for 102 years,” he said.

Ma himself has kept a low profile since late 2020, when financial services company Ant Group canceled IPOs in Hong Kong and Shanghai that sought to raise more than $34 billion.

In a separate internal letter in April, he praised Alibaba’s management and its restructuring efforts after the company split the group into six independently run companies.

Alibaba recently completed the process of converting its secondary listing in Hong Kong to a primary listing, and on Tuesday was added to a program that allows investors in mainland China to trade Hong Kong-listed stocks.

Alibaba shares fell 1.2% to 80.60 Hong Kong dollars, or $10.34, at midday Wednesday, after rising 4.2% on Tuesday on Stock Connect. The company’s shares have gained 6.9% this year.

Write to Jiahui Huang at [email protected]

(END) Dow Jones Newswires

September 11, 2024, 00:25 ET (04:25 GMT)