Jack Ma speaks out again, will Alibaba be better after 'reflection'?

Source | Dongge's E-commerce Insights

Author | Jin Shan

Alibaba continues to reflect amidst transformation and turbulence.

Following Joseph Tsai's candid admission in an interview that "Alibaba has fallen behind," Jack Ma, who retired five years ago, shared a lengthy post on the company's internal forum for the first time, affirming the reforms of the past year.

Jack Ma said, "Many people sent me the video of Joe's interview these days. Some told me that the video's frank admission of our past mistakes was quite bold. Yes. I appreciate Joe's courage and sense of responsibility. Making mistakes is not terrible—no one is immune to them. What’s truly 可怕的是不知错、不认错、不改错."

On April 10, Alibaba's U.S. stock price surged 2.2%, while its Hong Kong shares rose 4.9%. A year after Jack Ma's last public remarks, Alibaba has reached a "critical moment."

Alibaba "Trapped" by the Era and Competitors

"Making it easy to do business anywhere" has always been Alibaba's mission.

Who are Alibaba's real users—consumers or merchants? Facing this question, Alibaba admitted past mistakes and emphasized the value of users.

"Alibaba has fallen behind because we forgot who our real customers are. Our customers are the users who shop on our app, and we failed to provide them with the best experience. To some extent, we’ve reaped what we sowed," said Joseph Tsai, Chairman of Alibaba, in a dialogue with Nicolai Tangen, CIO of Norway's sovereign wealth fund.

Alibaba has witnessed the entire e-commerce industry grow from its infancy to rapid development. After accumulating early users and merchants, Alibaba began exploring new directions for growth.

The focus shifted to Tmall, and offline, the company launched its "New Retail" strategy. At the time, the dominant narrative was about consumption upgrades.

The 下沉市场 gave Pinduoduo room to grow. Taobao also launched the Taote app as a defensive move, but it failed to deliver significant 业绩增长 and eventually faded from the scene.

Pinduoduo, which emerged from the 下沉市场， briefly surpassed Alibaba in market cap. In March this year, Pinduoduo's U.S. market cap hit $197.8 billion, overtaking Alibaba. An Alibaba employee once posted internally, "No one expected that the humble ‘cut one 刀’ would now become the ‘old 大哥’!"

Beyond Pinduoduo, there’s also JD.com and the rapidly rising Douyin. As the pioneer of e-commerce, Alibaba once couldn’t find competitors even with binoculars. Now, it faces competition from all sides.

"The most crucial change this year isn’t chasing KPIs but recognizing ourselves and returning to the 轨道 of customer value," said Jack Ma. This amounts to a course correction for Alibaba’s past development path.

"We’ve taken a knife to the 大公司病， transforming from a slow-moving organization back to one that prioritizes efficiency and the market, making the company simple and agile again," Jack Ma added.

The team has also grown younger.

"The new management faces problems and the future head-on, trusts the young, and fully empowers 年轻 teams. They’ve made clear, decisive choices about what we want and don’t want. Our idealistic 情怀 and the mission of ‘making it easy to do business anywhere’ will never change. But over the past year, the new management has implemented changes—not just breaking through yesterday’s 固化 strategies but also building Alibaba’s future," Jack Ma said.

"Before, our competitors were too weak, so any change or 折腾 was right," said Li Chengdong, founder of Dolphin Research. "Now that competitors are strong, no matter how we change or 折腾， performance doesn’t improve. That makes people doubt the team and wonder if the changes were wrong."

Alibaba is also 重新谋划布局。

Focusing on E-Commerce Core, Betting on AI

Last March, Alibaba launched its "1+6+N" restructuring plan, aiming to spin off units "one by one when 成熟." But as the capital environment shifted, IPO plans for Cainiao and Hema were shelved. Alibaba 被迫收缩其他业务 and began 减持股票， gradually refocusing on its core e-commerce business.

"If Taobao doesn’t perform well, Tmall will be like water without a source or a tree without roots," said Li Chengdong, founder of Dolphin Research.

As the era of 理性消费 arrives, consumers are willing to buy expensive items but don’t want to overpay. To win the 性价比 war, Taobao has been constantly reforming. It’s now "correcting course," using 低价供给 to win back consumers.

It’s prioritizing 中小商家 and launched a "Five-Star Price Power" strategy.

Recently, 1688 fully integrated into Taobao, allowing 源头工厂店 to offer more 低价商品. Many factory stores previously produced for big brands and can now provide brand alternatives.

Earlier, Jack Ma said, "The AI e-commerce era has just begun, presenting opportunities and challenges for everyone." In his latest internal post, he reiterated AI’s potential.

"In this era of technological upheaval, three to five years in the internet space feels like a century—enough for 翻天覆地的 changes. I believe e-commerce in three years won’t resemble today’s hottest trends… What matters isn’t catching up to others today but imagining how tomorrow’s e-commerce can enhance the 消费体验… The AI era has just begun; everything is starting, and we’re right on time!" Jack Ma noted.

Currently, AI’s role in e-commerce mainly involves aiding pre-purchase decisions，智能推荐商品， and streamlining merchant operations. It seems more about 降本增效. Compared to large models, it’s hard to tell a new story about how AI can unlock greater 想象力 in e-commerce.

AI’s 想象力 may lie with Alibaba Cloud. "Tongyi Lingma" has become China’s first AI programmer and is now available on the 通义千问 app, enabling users to write, read, and learn code anytime, anywhere. "In the future, programming will be left to AI. Everyone will be a software engineer," said Jensen Huang, CEO of NVIDIA.

Joseph Tsai said in an interview, "With the restructuring and new management in place, we’re more confident about being China’s top e-commerce player." He added, "Though we weren’t as confident as before and felt competitive pressure, we’re back now."

Amid fierce e-commerce competition and a turbulent external environment, Alibaba, after "刮骨疗伤，" may open a new chapter.

References:

1. China Entrepreneur Magazine: Jack Ma Reflects on Alibaba’s Past Five Years: Fixing Our Favorite Bad Habits

2. New Product Insight: Jack Ma’s New Retail Dream Awakens

3. New Consumer Daily: Why Jack Ma Spoke Out Now

4. Investment Community: Joseph Tsai’s Dual Reflections