Stock Price Soars, Market Value Jumps by 300 Billion in One Day—What Did Alibaba Do Right?

Alibaba’s Stock Price Surge: Market Value Jumps by $30 Billion in One Day—What Did Alibaba Do Right?A Return to One Alibaba: From “Decentralization” to “Centralization”.Let’s rewind to the beginning of 2023. At this point, Alibaba’s struggles began to show. The previous year’s Double 11, the annual shopping festival that Alibaba pioneered, saw the lowest growth in its history. It was also the first year Alibaba stopped publishing its GMV (Gross Merchandise Volume) numbers. Officially, it was dubbed “steady with positive growth,” but the fact that the transaction volume remained flat compared to the previous year indicated that Alibaba was struggling to grow. On the one hand, Pinduoduo had grabbed market share in the lower-tier markets, and on the other, consumers in tier-one and tier-two cities, who used to spend freely, were now tightening their belts due to the overall downturn in consumption. Even worse, short-video giants like Douyin (TikTok) and Kuaishou were rapidly expanding into content e-commerce, further encroaching on Alibaba’s traditional e-commerce turf. Alibaba’s dominance in the e-commerce space seemed to be at risk.

To turn things around, in March 2023, then-CEO Daniel Zhang sent out an internal letter titled “Only through Self-Transformation Can We Create the Future,” announcing the company’s largest organizational restructure ever. This restructuring, referred to as the “1+6+N” organizational change, aimed to make Alibaba more agile, with shorter decision-making chains and faster customer responses. The “1” refers to Alibaba Group itself, while the “6” denotes six business groups: Cloud Intelligence, Taotian Group, Local Services, Cainiao, International Digital Commerce, and Big Entertainment. The “N” represents other independent non-core business units, such as Alibaba Health, Hema, Gaoxin Retail, and Quark.These six business groups formed their own boards of directors and adopted a “CEO responsibility under the board of directors” system. Alibaba Group transitioned into a holding company for these six units. The idea was to make Alibaba more responsive and entrepreneurial, giving the various business groups the independence to face market challenges head-on. As Zhang emphasized, “The market is the best test,” and employees would “fight for their own business.” The aim was to spark entrepreneurship and innovation within each business unit and reignite the company’s vitality.However, just after implementing the 1+6+N structure, Alibaba initiated a higher-level leadership change.

In September 2023, Daniel Zhang stepped down from his roles as CEO and Chairman, handing over the reins to Wu Yongming. Wu continued with the 1+6+N model to some extent but made adjustments. In September 2023, Wu also took over as CEO of Cloud Intelligence Group, while Zhang departed. In November, Alibaba’s wholesale platform 1688 and second-hand goods platform Xianyu were upgraded to first-tier businesses under Taotian Group. Within a month, Taotian Group underwent another restructuring, forming six new divisions, with Wu Yongming taking over as CEO of Taotian Group.Wu Yongming’s leadership shift also involved regaining control over some key operations, such as overseeing the two most critical business units: Cloud Intelligence and Taotian. As chairman Joe Tsai noted, this centralized leadership would allow for unified command and high-intensity investment to align the core strategies of e-commerce and cloud services. In November 2024, Alibaba announced the creation of the “Alibaba E-commerce Business Group” to include core e-commerce operations like Taotian and Alibaba International, further streamlining operations and consolidating resources.Alibaba’s Strategy Shift: From Fragmentation to Coordination.Under Wu’s leadership, Alibaba began to shift focus from business fragmentation to greater collaboration. In mid-2024, Wu’s leadership emphasized focusing on long-term, sustainable value rather than pursuing short-term gains.

This was a notable shift from the era of rapid splits and independent business units to a more coordinated and strategic direction. By the end of 2024, Alibaba had implemented several key cultural and organizational changes, such as unifying the company’s internal branding with new employee badges, symbolizing the “One Alibaba” identity. This was intended to reinforce the unity and shared mission across all Alibaba’s business units.Organizational Rejuvenation: Returning to Its Roots.As part of Wu’s efforts to rejuvenate Alibaba, the company has focused on restoring its entrepreneurial spirit. Wu and other senior leaders emphasized returning to the company’s startup roots by revisiting the iconic “Lakeview Garden,” where Jack Ma first launched Alibaba. They even replicated the original location in Hangzhou to remind employees of their mission and values. This symbolic move was part of a broader strategy to revitalize the company’s culture and motivate employees to embrace the entrepreneurial mindset that had once fueled Alibaba’s explosive growth.Revamping Talent and Management: The Key to Innovation.In 2023, Wu Yongming identified a critical issue—Alibaba’s aging workforce. According to a 2024 survey, the average age of Alibaba employees had risen to 33, making it the oldest among China’s major tech companies.

Wu’s response was to push for a “young team” strategy, targeting a shift in leadership toward younger managers and fostering greater talent mobility. By 2025, Alibaba had introduced a more flexible internal talent flow system, allowing employees to transfer between different business units without losing tenure or benefits. This change has injected new vitality into the organization, with many young and ambitious leaders stepping up to drive innovation.Looking Ahead: The Future of Alibaba.Despite the challenges it faces—competition from Pinduoduo, JD.com, Meituan, and ByteDance’s e-commerce ambitions—Alibaba is set on reclaiming its leadership position through strategic internal reforms and a renewed focus on its core strengths. The company’s ability to adapt to the changing market conditions and technological trends, such as AI and cloud computing, positions it to thrive in the next phase of the internet economy.Conclusion.In the volatile and competitive landscape of e-commerce and tech, Alibaba has shown resilience. With its organizational overhaul and shift back to core values, the company is laying the groundwork for long-term success. While its competitors continue to close in, Alibaba’s proactive moves signal that the company is not just surviving but positioning itself for a new phase of growth. As the market responds with optimism, Alibaba’s future seems more secure, reaffirming the strategic direction of “one unified Alibaba.”