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Alibaba makes leadership changes after bruising by rival’s success

By Diksha Madhok and Juliana Liu, CNN

(CNN) — Alibaba has reshuffled its top ranks after the stellar performance of a competitor caused a stir at the tech giant.

Eddie Wu, Alibaba Group CEO, will now also head the firm’s e-commerce business, replacing Trudy Dai, who has been with the company for over two decades, according to an internal letter from Joe Tsai, chairman of Alibaba Group, which was seen by CNN.

Dai, who is one of Alibaba’s 18 co-founders, will be setting up an asset management company for the group, the letter said.

Shares in Alibaba (BABA) were up over 3% in Hong Kong on Wednesday.

The shakeup comes weeks after billionaire co-founder Jack Ma called for “change” at the company, as the dramatic success of rival PDD (PDD), the group behind Chinese online shopping giant Pinduoduo and US-based retail upstart Temu, rattled China’s e-commerce industry.

PDD’s stock has skyrocketed 77% so far this year, allowing it to surpass Alibaba in market capitalization for the first time last month.

The surprise management change comes just three months after Wu replaced Daniel Zhang to become Alibaba Group’s fourth CEO in its 24-year history. He also took over as head of the cloud division after Zhang’s surprise exit from the unit.

“Eddie has … navigated tough trade-offs and made difficult but necessary decisions,” Tsai said in his letter. “Eddie’s leadership of both Alibaba Cloud and TTG will ensure total focus on, and significant and sustained investment in, our two core businesses of cloud computing and e-commerce, as well as enabling TTG to transform through technology innovation.”

TTG refers to the Taobao and Tmall Group, which includes Alibaba’s online shopping platforms.

Alibaba’s shares have tumbled 18% so far this year as it battles concerns over a sweeping restructuring, a leadership shuffle and fierce competition.

Last month, Ma urged employees to “pay any price and sacrifice” to help reform the company after PDD’s performance caused nervousness.

PDD, which was founded in 2015, has enjoyed a bumper year. It has also attracted international attention for its launch of Temu, an affordable online superstore that has become hugely popular in markets such as the United States and Australia. Temu sells everything from home goods to apparel and electronics.

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