Jack Ma, cofounder of Alibaba.
PHILIPPE LOPEZ/AFP via Getty Images
Alibaba’s billionaire cofounder Jack Ma, who has kept a low profile in recent years, wrote a rare internal post on Wednesday, urging employees at the e-commerce giant to keep innovating and reiterating that the tech giant will change as a once-small competitor – namely PDD Holdings —is on the verge of surpassing Alibaba in market cap.
Ma, 59, isn’t involved in the e-commerce behemoth’s daily operations after stepping down as executive chairman in 2019. But his wealth of $24.8 billion, according to Forbes’ real-time tracker, is still derived partly from a stake in New York- and Hong Kong-listed Alibaba.
The billionaire made his comments in an internal post seen by Forbes. He was responding to employees’ discussions on how PDD Holdings, a fellow e-commerce platform known for using discounts to attract budget shoppers across the country, may soon overtake Alibaba in terms of market capitalization.
“Today, everyone at Alibaba is watching and listening now,” Ma wrote. “I firmly believe that Alibaba will change and amend itself. All great companies are born in a winter.”
An Alibaba spokesperson and Ma’s personal Jack Ma Foundation didn’t immediately respond to requests for comment. Shares of the company have lost almost 40% of their value since January, giving Alibaba a current market cap of $195.2 billion in New York.
Aside from lackluster consumption and heightened competition from rivals including PDD, investors were also spooked by the company’s surprise reversal of a major corporate overhaul announced back in March. Citing reasons including uncertainties caused by U.S. chip export restrictions, Alibaba decided to call off the initial public offering of its cloud computing unit. Ma has reportedly halted plans to trim his company stake, in a gesture that is designed to show confidence over its long-term prospects.
PDD, in the meantime, has managed to reap blistering growth with its discount strategy and the rapid expansion of its U.S. shopping app Temu. The Nasdaq-listed company currently has a market cap of $183.4 billion, after shares soared 18% on Tuesday as growth exceeded expectations by a large margin.
Founder Colin Huang, who stepped down as chairman in 2021 but continues to derive his wealth from a PDD stake, has added a whopping $7.5 billion to his net worth in a single day. The mogul’s wealth of $49 billion now makes him the second richest billionaire in China, after bottled water company Nongfu Spring founder Zhong Shanshan, according to Forbes’ real-time tracker.
“As the consumption pattern changes in China, PDD is encroaching further on the turfs of Alibaba’s Taobao and Tmall shopping sites,” says Shen Meng, managing director of Beijing-based boutique investment bank Chanson & Co. “It has caused Alibaba to feel a bigger sense of threat.”
In his post, Ma congratulated PDD on its recent success. But the billionaire also notes that there are now challenges and opportunities for everyone as artificial intelligence now drives a new chapter in e-commerce. He didn’t elaborate further on the opportunities and what Alibaba may pursue. The company unveiled this year its own generative AI model Tongyi Qianwen, and said it will be integrated across various businesses to improve user experience.