Alibaba has announced a significant leadership change within its grocery arm, Freshippo, as part of its ongoing restructuring efforts. Yan Xiaolei, currently serving as Chief Financial Officer, will take over as the new CEO of Freshippo, replacing founder Hou Yi. While Hou will retire from his CEO position, he will continue to support the company in a senior advisory role.
This decision comes amidst a series of strategic shifts at Alibaba, prompted by challenges and regulatory scrutiny that have impacted its competitive position against rivals like PDD Holdings Inc. and ByteDance Ltd. Once regarded as the most valuable company in China, Alibaba has been striving to regain momentum, initially considering a division into six separate entities. However, this plan has faced setbacks, including the sudden departure of former CEO Daniel Zhang and the postponement of Freshippo’s Hong Kong IPO due to market conditions.
To rejuvenate growth, Alibaba has been promoting a new generation of executives to lead various business lines, spanning its core domestic commerce operations and key cloud computing division. Additionally, the company is exploring options to divest assets and scale back its previous “new retail” initiatives under Zhang’s leadership. Chairman Joe Tsai indicated in a recent earnings call that physical retail operations are no longer a primary focus for Alibaba, signaling a potential exit from these ventures.
Freshippo, established in 2016, currently operates over 360 stores across China, with plans to expand by opening 70 additional locations in 2024. This leadership transition underscores Alibaba’s ongoing efforts to adapt to evolving market dynamics and position itself for sustained growth in the future.