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Daniel Zhang, Alibaba's next chairman, fancies himself as a free spirit

Liza Lin | WSJ/ 13 Sep 18 | 08:16 PM

Daniel Zhang

The man who has been anointed as the next executive chairman of Alibaba Group Holding Ltd. chose “Free and Unfettered Person" as his company nickname.

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It might have been wishful thinking.


Daniel Zhang, 46 years old, an accountant by training and chief executive officer at one of China’s largest internet companies, works most nights till 11 p.m. and spends many weekends networking with other executives, according to a person familiar with Mr. Zhang.


On Monday, Alibaba founder Jack Ma announced that Mr. Zhang would succeed him as executive chairman when Mr. Ma steps down one year from now.

It was hardly a surprising choice: Mr. Zhang has been the chief executive officer since 2015, and he is widely respected for helping the company continue its growth during that time, with net income last year of $10.2 billion.


In disclosing the succession plan Monday, Mr. Ma cited Mr. Zhang’s business acumen. “Under his stewardship, Alibaba has seen consistent and sustainable growth for 13 consecutive quarters," Mr. Ma said in a letter addressed to customers, shareholders and employees. “His analytical mind is unparalleled, he holds dear our mission and vision, he embraces responsibility with passion, and he has the guts to innovate and test creative business models."


Alibaba employees all choose in-house nicknames, and Mr. Zhang chose “Free and Unfettered" because “he’s always chasing and seeking—to be free and not tied down to anything," another person familiar with Mr. Zhang’s thinking said.


Alibaba didn’t make Mr. Zhang available for comment. 


Among other accomplishments, Mr. Zhang is known for turning Singles Day, an informal holiday celebrated by China’s young singletons, into a phenomenal promotional vehicle for Alibaba’s online shopping platforms.


Young singles are among Alibaba’s core customers, and on Singles Day in 2009—Nov. 11—Alibaba offered them huge discounts on apparel, electronics and just about everything else it sold.


Now past its ninth year, the discounts have been scaled back, but the day has since become a must-do marketing event for consumer brands in China, with some brands preparing months in advance for the shopping bonanza.


Last year, the e-commerce giant said it racked up more than $25.3 billion in sales in the 24-hour period that began at 12 a.m. on Nov. 11—helped along by a gala TV show, a marketing campaign that pushed advance orders, and the usual discounts on everything from cosmetics to cars.

“Ahead of that first 11.11, for us, it was just about survival, about finding a way to make a small business grow quicker," Mr. Zhang, soft-spoken and cerebral, said late last year in an interview on an Alibaba media site. “But looking back, it was really all about the spirit of entrepreneurship that prevails at Alibaba."


Mr. Zhang, who received his bachelor’s degree in finance from Shanghai University of Finance and Economics, joined Alibaba in 2007 as chief financial officer of Taobao, the company’s e-commerce website that consumers and small businesses use to sell to each other.


The following year, he started overseeing Tmall’s predecessor, Taobao Global, and helped convert the business-to-consumer platform from an obscure shopping website to an online retail behemoth highly sought after by brands looking to sell in China.


The online retail site Tmall has become one of Alibaba’s greatest success stories, said Jason Yu, the general manager of Kantar Worldpanel China, helping convert Chinese shopping habits from seeking cheap goods to more 

upscale products.


The platform has recently attracted several luxury brands such as Estée Lauder and Tiffany & Co. to sell on its website, Mr. Yu noted.

Mr. Zhang was also a key architect behind Alibaba’s new retail initiative, which sought to blend online shopping with bricks-and-mortar stores through its Hema grocery chain.


Hema, which expanded to more than 45 stores across China in fewer than two years, offers Chinese consumers the option to shop in-store, savor freshly cooked food on its premises, or use an app to order groceries to be delivered home.

Still, in Hema’s nascent stages, Mr. Zhang kept his new project a secret from Mr. Ma for almost two years, according to one of the people familiar with Mr. Zhang.


Given the complexities of blending online and physical commerce, Mr. Zhang didn’t want to explain his pet project to his boss until he had found the best operation model for such a setup, the person said.


To keep it under wraps, Mr. Zhang would meet Hema’s current CEO clandestinely in warehouses to discuss operations, and decided to open their first store in Shanghai instead of Alibaba’s headquarters of Hangzhou, this person said.


Mr. Ma found out formally when he was invited to a media tour of a Hema store in Eastern China, the person added.


“When Jack first started talking about new retail, no one knew what it would be about, and everyone was a bit lost," said John Choi, analyst at Daiwa Capital Markets. “Daniel did a good job of articulating to investors and analysts what new retail is, executing his vision."


Still, investors need to be convinced that Mr. Zhang can fill the shoes of his visionary successor over the longer run. Alibaba shares fell 3.7%.

Source: The Wall Street Journal 

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