Alibaba, Purveyor of Strange Things, Restructures

Does Alibaba ring a bell? They’re that fascinating internet goods platform providing some of the strangest products on the webosphere. You can get a dress that looks like a cut of steak, living clam worms (whatever those are), and a giant metal flame retardant suit, should you ever need it. But hey, it just costs $50, so why not?

Alibaba’s habit of piquing the internet’s curiosity seems to have paid off. The company was founded in China in 1999 to compete with eBay. The then-CEO had an interesting quote that seemed to sum up their whole business gameplan.

“Ebay is a shark in the ocean. We are a crocodile on Yangtze River. If we fight in the ocean, we will lose. But if we fight in the river, we will win.”

Essentially, change the system. Sell used goods like Ebay, but don’t make the focus about quality. And then add a bunch of companies trying to get rid of their odd things that just couldn’t sell wholesale. Let bigger companies with excess inventory be Alibaba’s unique niche. Just find all the random junk, and generate attention and revenue that way. Fifteen years later, Alibaba became a publicly traded company.

But last week, needing new public investors, Alibaba announced they’d be splitting up into six different sections, according to the NY Times.

Now on Tuesday, chairman and chief executive Daniel Zhang announced he’ll be stepping down from both roles. Two key founding members of the company are stepping in to replace him.

Essentially, if it ain’t broke, don’t fix it. Or if it’s broke, fix it back to the way it was. “This is like the oldest of the old guard. The trusted team, the old guard, is back in control,” said Duncan Clark, chairman of a key Chinese investment advisory firm.

This comes after Alibaba felt the squeeze as China announced they’d be cracking down to further regulate the free market. A number of key tech executives were even jailed, and the president pressured companies to donate a chunk of their cash to underdeveloped, rural regions in the nation. The company certainly felt the squeeze.

The original founder of Alibaba, Jack Ma, went underground for a while after publicly criticizing the government for over-regulating a financial services app group. He finally re-emerged after the company announced they’d be restructuring. Alibaba itself was fined $2.8 billion for trying to prevent other websites from selling their products.

Still, the company is far from standing on their last leg. But they had to show regulators that they were changing personnel to appease them. Seems like if you want your corporation to get ahead in China, it’s the president, not profit, that takes priority.