Alibaba announced that COO Daniel Zhang would replace Jonathan Lu as CEO in its earnings report on Thursday.
It’s unclear what exactly prompted the CEO change, but Zhang is stepping into a challenging situation. As seen in the chart below, put together by BI Intelligence, Alibaba is facing slowing growth as competition intensifies in the Chinese market, where the majority of Alibaba’s sales come from. Its 43% growth was slightly higher than last year’s, but almost half of what it saw two years ago.
Consumer spend on Alibaba is also slowing down. Its gross merchandise volume (GMV) increased 41% to $US97 billion in the first quarter, but that was the lowest growth rate in nearly 3 years. Add that to the fact that Alibaba has been under fire from Chinese regulators for allowing counterfeit goods on its sites, and Zhang may have more problems to deal with than he had imagined.