It’s time for Alibaba to dual-list, among other changes

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On November 15, 2019, Alibaba went public for the second time in Hong Kong. Zhang Yong sent his first letter to shareholders after he became the chairman of the board of directors, describing Alibaba’s new starting point and the upgraded vision “to become a living 102 A great company of the year”.

No one could have imagined it at the time, and in a few months, 2019 will be a distant memory, getting further and further every year.

When writing a shareholder letter in 2020, Zhang Yong also felt that “the door to the world has already reopened, and we can travel freely” a year later. Published a letter to shareholders today, he wrote that what Ali is facing is already the “question of the times”.

For the Alibaba company, the biggest change has occurred in the past year. One-quarter of the Alibaba partners who firmly controlled the Alibaba Group resigned. This is the biggest change since the operation of the Alibaba partner system, mainly because the managers of Ant Group resigned. Ali’s three major strategies have also changed from “globalization, domestic demand, big data and cloud computing” to “consumption, cloud computing, globalization”, and the order has changed. Ant Group, which can best undertake the strategy of “big data”, also Disconnected from Ali in the past year.

The newly implemented “operational responsibility system” and “diversified governance” assign more responsibilities to the heads of Alibaba’s various segments and specific businesses. The presidents of each business unit have become more like CEOs, managing a group of fully functional businesses and being accountable for profit and loss.

The listing location of China’s largest retail group will also change. In the next few months, if all goes well, Alibaba will switch from being listed primarily in New York to a dual listing in Hong Kong and New York. If it is delisted from the New York Stock Exchange in the future, its stock trading will not be greatly affected.

In his letter to shareholders, Zhang Yong said the company “must change faster than this era” in the face of great uncertainty. Now, Ali’s changes have begun, and the changes of the times have not stopped.

Ali partners are missing nine

But the control of the company has not changed

The invention and birth of the Ali partnership system is a more important thing that Alibaba has done in the past ten years than any single business decision.

In July 2010, Alibaba started to create and trial run the partner system internally. The core requirements for selecting partners are: have worked in Alibaba for more than 5 years, highly identify with the company’s culture, have made positive contributions to the company’s development, and are willing to contribute to the company’s culture. And the mission legacy is doing its best – candidates need more than three-quarters of the partners to agree to be elected, that is, 29 partners need at least 22 votes in favor.

It can be said that this system design ensures the inheritance of Ali’s organizational culture and values, and ensures that the partners selected by the core founding team can always maintain control of the listed company, no matter who holds the company’s shares.

According to the financial annual report released today, Alibaba’s largest shareholder is SoftBank Group, holding 23.9% of the shares. Cai Chongxin, who holds the most shares among all Alibaba Group executives and board members, only accounts for 1.4%. When founder Jack Ma resigned from the board in 2020, only 4.8% remained, and the proportion was no longer announced after that. But there is no doubt that Ali’s partners have control over the company.

An Ali source said that the partners hold meetings from time to time, mainly discussing Ali-related matters based on culture and values.

In Ali’s latest fiscal 2022 report, there are currently only 29 partners in Ali, 9 less than the previous fiscal year, and no new ones. Except for the retirement of Wang Shuai, the former chairman of Alibaba’s Marketing Public Relations Committee, and Hu Xiaoming, the former president of the Public Welfare Group, the other 7 partners withdrew from Ali due to the need to separate Ant and Ali, including Jing Xiandong, Ni Xingjun, Peng Yijie, Shao Wenlan, Wu Minzhi, Zeng Songbai and Zhao Ying.

So far, Ant has no management to serve as a partner of Ali. Alibaba’s annual report also disclosed that it has revised the “Partnership Agreement”. According to the latest agreement, the partner should be a person from Alibaba Group. From May 31, 2022, a person from a related party of Alibaba Group will no longer be a partner.

At present, Alibaba’s number of partners is the smallest since its listing in 2014, when Alibaba still had 30 partners.


The Ali Partner Committee has also been reduced from 6 to 5. It is composed of founder Jack Ma, Group Executive Vice President Cai Chongxin, Chairman of the Board and CEO Zhang Yong, Partner Peng Lei and Chairman of the Group Technology Committee Wang Jian. CEO Jing Xiandong has resigned from the partner committee. The Partner Committee is mainly responsible for organizing the election of all partners.

At present, the 29 partners are divided into three echelons – a total of 12 people in the four major sectors and other businesses, responsible for the operation and innovation of the front-line business; a total of 11 members of the group’s senior management team, represented by Zhang Yong, are responsible for the company’s overall affairs; There are a total of 6 “elders” partners represented by Jack Ma, who focus more on macro aspects such as cultural heritage and the company’s long-term strategy. details as follows:

A total of 12 people in the four major sectors and other businesses

  • 2 people in the domestic digital business sector: Dai Shan, president of the business group, and Wang Hai, vice president of the business group.
  • 0 people in the overseas digital business sector.
  • 4 people in the cloud and technology sector: Zhang Jianfeng, President of the Cloud Intelligence Business Group and Dean of Bodhidharma Institute, Cai Jingxian, Senior Researcher of the Business Group, Chen Lijuan, Vice President of the Business Group, and Jiang Jiangwei, Vice President of the Business Group.
  • There are 4 people in the life service sector: Yu Yongfu, president of the business group, Fang Yongxin, general manager of local life business, Liu Zhenfei, president of AutoNavi business, and Wu Zeming, chief technology officer of local life.
  • 2 people in other businesses: Fan Luyuan, President of Ali Entertainment Business Group, and Zhu Shunyan, Chairman and CEO of Ali Health.

There are 11 people in the management team of Ali Group

They are Zhang Yong, Chairman of the Board and CEO, Cheng Li, Chief Technology Officer, Tong Wenhong, Chief Talent Officer, Jiang Fang, Deputy Chief Talent Officer, Song Jie, Vice President of Human Resources of the Group, Wen Jia, President of the Group’s Public Affairs Line, Yu Siying, Chief Legal Officer of the Group, Zheng Junfang, Chief Risk Officer, Chief Platform Governance Officer and Chief Customer Officer, Sun Lijun, Chairman of the Group Public Welfare Foundation, Wang Lei, Senior Vice President, and Wu Wei, Group Director.

6 senior partners

They are founder Jack Ma, group executive vice chairman Cai Chongxin, partner Peng Lei, chairman of the group technical committee Wang Jian, senior vice presidents Wu Yongming and Shao Xiaofeng.

Jack Ma and Cai Chongxin are the only permanent partners of the 29 people.

Other partners must retire when they reach the age of 60 or terminate their employment relationship with Ali, while permanent partners can continue to serve as partners until the age of 70. Even when the age limit is reached, the age limit can be extended by a majority vote of the partners.

It seems like a lot has changed, as if nothing has changed.

In the past year, Ali’s new organization and new strategy

On May 10 this year, Zhang Yong held a sharing session with all employees on the Ali Family and Friends Day. When it came to organizational agility, he repeatedly expressed that he would do things from the top, the first position in the business, and senior classmates (executives). Start with clear goals, better efficiency, and decisive trade-offs.

Zhang Yong emphasized to the business leaders of Ali at the organization department conference almost a year ago, “Today’s Ali, relying only on me and a few O’s in the group, cannot be a family.”

Alibaba’s businesses are becoming more and more intertwined and complex. How to build a flexible and agile organization? This is a question that Zhang Yong has been thinking about since 2020.

“LatePost” has continued to report on this. At the end of 2020, Zhang Yong believes that the middle platform should be thinned , made agile and fast, and the manpower saved can be personalized; by the middle of 2021, he will start to The operation responsibility system , which was piloted in one year, was extended to more departments; at the end of last year, Zhang Yong upgraded the strategy of China and Taiwan, which had been used for 6 years, to a new organizational strategy – “diversified governance” .

“Thinning the middle and Taiwan” is a prelude to Zhang Yong’s thinking about how to make the organization agile, while “operational responsibility system” and “diversity governance” are two sides of this problem. The former is a means, and the latter is a result.

The “operational responsibility system” refers to Zhang Yong’s delegation of power at the business group (BG) level, and the business president assumes more responsibilities and becomes a business leader (ie, the CEO of a small number one). Legal affairs, human resources, public relations, etc., are similar to an independent company that independently calculates profits and losses.

“Diversified governance” is an upgrade of “sector governance”. If the management responsibility system is to make a single business self-sufficient, then diversified governance refers to dividing multiple related businesses into one sector, with one business and one sector. In charge of the president, independently manage their respective sectors, focusing on “independence and autonomy”.

Based on this, Ali has added 4 chief executives in charge between Zhang Yong, chairman and CEO of the board of directors, and nearly 20 business group presidents. They are Dai Shan, Zhang Jianfeng, Yu Yongfu and Jiang Fan, who are responsible for domestic digital business, cloud and The four major sectors of technology, life services and overseas digital business are the four core business executives of Ali.

However, among the senior executives disclosed in Ali’s latest annual report, only Dai Shan is listed among the four core business executives.

In Ali’s zoo, the ants are gone

This year, the ants in the “Ali Zoo” on the homepage of Ali’s annual report are gone.


After the suspension of listing for one month, Ant Group established a rectification working group to implement the regulatory requirements mentioned by the competent authorities, such as establishing a consumer finance company, increasing capital and lending entities, and applying for the establishment of a financial holding group.

During the period, the cutting between Ant Group and Alibaba, which holds about 33% of the shares, continued. As small as the split of the intranet and the transfer of employees – almost at the end of last year, Ali employees who want to transfer to Ant need to leave first and then join. Further up, there are also rumors that the management of Ant is going to make a cut with Ali’s partners.

This year’s 9 Ant executives no longer serve as Ali partners is one of the latest developments. On July 25, Alibaba and Ant Group terminated the “Data Sharing Agreement”. In the future, the two groups will negotiate the terms of the data sharing arrangement according to the specific circumstances within the scope permitted by law. The agreement was originally valid until 2064. At the end of last year, Ant Group stopped paying annual fees to Alibaba for its SME loan business, ending the seven-year commercial arrangement.

A former Alibaba employee said that the “cut” that impressed him the most was the creation of a separate intranet by Ant at the end of last year, the “ant nest”. In the past, Alibaba Group and Ant employees used the same intranet, “Ali Weier”. Employees all post and reply there, and the business will be marked under the avatar, such as Ant Group, Ali Group, Cainiao and so on. After the independence of the intranet, Alibaba employees cannot go to Ant Nest, and Ant employees cannot go to Ali Taste.

Perhaps in order to better demonstrate independence, Alibaba said in its fiscal 2022 annual report that Jack Ma intends to gradually reduce and then limit his direct and indirect economic interests in Ant Group, and not to “obtain any economic benefits” from Jack Ma and his affiliates. way” is carried out. This year, Alibaba also launched Pay, which serves cross-border trade receipts, payments and remittances, competing with the international version of Alipay.

It’s time for a dual listing

Another major capital market arrangement disclosed in Ali’s 2022 fiscal year annual report is to seek a “primary listing” on the Hong Kong Stock Exchange.

In the past two years, the most common methods of returning to Hong Kong for Chinese concept stocks are “Secondary Listing” and “Dual Primary Listing”. “Secondary listings” include Alibaba,, Baidu, NetEase, Bilibili, etc. “Dual primary listings” include Xpeng Motors, Li Auto, Zhihu, BeiGene, etc. Bilibili is one step ahead of Alibaba in seeking a major listing in Hong Kong.

According to a number of senior market players, the biggest difference between the two listing methods is that the regulatory and compliance requirements for secondary listing are relatively low, the listing process is relatively simple, and takes less time. After the company is listed, it can be included in the index, such as Hang Seng The technology index, and then the allocation of institutional investors can be obtained. Shares traded in its main listing place can be transferred to the Hong Kong Stock Exchange on a pro rata basis to continue trading.

The disadvantage is that the secondary listed stocks cannot be included in the Southbound Stock Connect temporarily, and mainland investors cannot directly trade. Tencent, which is similar in size to Alibaba, currently has more than 11% of its outstanding shares in the hands of mainland investors, worth about 225.7 billion yuan. An overseas capital market person mentioned that Alibaba, which went to Hong Kong for a secondary listing in 2019, once thought that it could push the Hong Kong Stock Exchange to include it in the Southbound Stock Connect, but it failed to do so, which may be the motivation for Alibaba to apply for a main listing in Hong Kong. .

For the listed Chinese concept stocks, in addition to being able to be included in the Hong Kong Stock Connect faster, other features of “dual main listing” seem to be “disadvantages”: higher compliance requirements, better governance structure requirements, and more information disclosure requirements. In detail, the shares in the place of initial listing cannot be converted, and it is necessary to fully meet the declaration, audit and other regulations of the regulatory agencies of the two places.

But over the past year or so, the U.S. has accelerated the accounting compliance requirements in the Foreign Company Accountability Act, and the U.S. Securities and Exchange Commission (SEC) has made it clear that foreign companies that do not meet the requirements will be delisted after a three-year transition period.

At that time, the company’s shares cannot be circulated in the United States, or even transferred to the pink sheet market (where Luckin will go after the withdrawal). When a company loses its primary listing, public market funding is also more restricted.

He speculates that Alibaba may have considered a little more: when it returned to Hong Kong to list, the Hong Kong Stock Exchange did not clarify whether the “dual main listing” company could still use the governance structure when it lost its overseas listing status, such as VIE agreement control, different shares of the same stock. rights, partnership system, etc. In order to adjust the governance structure as little as possible, Ali chose a secondary listing.

On January 1 this year, the Hong Kong Stock Exchange launched new regulations. If a Chinese concept stock company is delisted from the United States, it can follow the various governance structures of the US stock market listing on the Hong Kong Stock Exchange to lower the listing threshold.

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