KUALA LUMPUR – It’s a mess, says an early adviser to Alibaba as the tech giant struggles to navigate past a turbulent 12 months.
“I think there are some deep internal issues. And so there must now be… a clear internal fight between how they’re going to get out of this because they’re really slipping,” said the Beijing-based investment adviser BDA’s chairman, Duncan Clark, to CNBC.
“The core to me is their eroding market position, what they are doing in terms of video, live stream and how they respond to Douyin, plus how they manage all these disparate groups and all the management turmoil.
“It’s a mess basically.”
Alibaba’s cloud computing unit was touted to capitalise on the growth of artificial intelligence until the Chinese giant scrapped its IPO plans last November, and much publicised corporate overhaul over the last year.
The group’s stock has plunged to below US$77 (RM357) a share compared to more than US$300 in 2020.
This was also in stark contrast to its much-celebrated IPO listing in the United States, which was the world’s largest in 2014.
The scrapped IPO plans also meant that employees would not be able to cash out.
“The whole mechanism of incentives is broken down,” said Clark, who published the book Alibaba: The House That Jack Ma Built in 2016.
He also claimed Alibaba tried to grow its cloud business by taking away big clients from third-party resellers.
Alibaba in November said the decision to pull its cloud IPO was due to US restrictions on chip sales to China.
Its cloud business revenue grew 2% year-on-year in the quarter ended September 30, 2023.
Alibaba has been the largest player in China’s cloud business, followed by Huawei and Tencent.
However, research firm Canalys predicted that Huawei’s market share would increase via a strategy of developing an ecosystem of experts and developers.
Another Alibaba subsidiary is exercising massive lay-offs in Southeast Asia.
Online shopping platform Lazada has been gearing up for a significant workforce reduction in Malaysia, following a parallel downsizing in its Singapore branch.
A source told Scoop that the marketing team was anticipated to bear the brunt of the lay-offs, with potential reductions of up to 90%.
The lay-offs will not be exclusive to Singapore and Malaysia as firings are expected to take place in Vietnam, Thailand, Indonesia and the Philippines.
The source also said that news of the lay-offs came just a week after Lazada opened a new floor in its office here to cater to an increased number of employees.
The Edge Singapore also reported that Lazada Singapore laid off its junior and senior employees from multiple departments, with the retrenchment exercise lasting until tomorrow.
Last month, Alibaba had invested an additional US$634 million into Lazada as it raced to compete with other e-commerce platforms, such as Shopee and TikTok Shop. – January 4, 2024