HONG KONG — ALIBABA Group Holding’s billionaire founder, Jack Ma, said Tuesday that he would step down as CEO ahead of a potential initial public offering (IPO) by China’s largest e-commerce company.
Mr Ma will remain as chairman, he said in a letter to employees. He will end his tenure as CEO on May 10, when a replacement will probably be named.
The former English teacher, who has led the group since its formation in 1999, has a $3.4bn fortune, according to the Bloomberg Billionaires Index.
The change follows a restructuring of operations announced earlier this month and may signal that Alibaba is finalising plans for a share sale. Alibaba also bought back a stake from Yahoo last year in a deal valuing the Hangzhou, China-based company at $35bn.
Alibaba Group includes Alibaba.com, an online market for small businesses; Taobao, a consumer shopping site; and Alipay, an online payment platform.
The value of deals on Taobao Marketplace and Taobao Mall, China’s largest e-commerce platforms, topped 1-trillion yuan ($161bn) — about 2% of China’s gross domestic product — in January-November, reflecting the boom in a sector where 16% of China’s 1.34-billion population shops online.
"A series of changes at Alibaba Group may suggest that an IPO is imminent," said Wendy Huang, an analyst at CIMB Securities, which is based in Hong Kong.
Mr Ma’s role "will not change too much" because he already is focused on long-term strategy", she said.
Mr Ma and 17 others founded Alibaba as an online marketplace for Chinese companies to sell goods. The business grew as the country’s economic liberation spurred a boom in manufacturing and trade. It has expanded its workforce to more than 24,000 while adding services including cloud computing, online payment and consumer auctions.
Mr Ma was likely to remain heavily involved "given the new plan looming on the horizon, which is the mother of all IPOs", said Duncan Clark, the Beijing-based chairman of BDA China, which advises technology companies.
"He will always have a larger than life influence on the company no matter what title he holds."
The billionaire said his new role reflected a wider push to hand over management to people born in the 1970s or 1980s as founders born in the 1960s stepped down.
"I want to encourage our young leaders to step forward to ensure a smooth transition," he said. "The next generation of Alibaba people are better equipped to manage an internet ecosystem like ours."
Alibaba would probably pick an internal candidate to replace Mr Ma as CEO, said Eric Qiu, an analyst at Guosen Securities in Hong Kong. The company named nine senior managers earlier this month as part of a restructuring that divided the group into 25 units.
John Spelich, a spokesman for Alibaba based in Hong Kong, declined to comment.
In an interview with The New York Times, Mr Ma acknowledged he was feeling the strain. "When I was 35, I was so energetic and fresh-thinking. I had nothing to worry about," he said, adding he would focus in his new role on broad strategic issues, corporate development and social responsibility.
"I will still be very active," he said. "It is impossible for me to retire."
Alibaba agreed in May last year to buy back a 20% stake from Yahoo for about $7.1bn. It flagged a potential IPO as part of the deal.
Yahoo acquired about 40% of Alibaba in 2005 in exchange for $1bn and ownership of Yahoo’s Chinese operations. At the time, Yahoo had a market capitalisation of $49.2bn, according to data.
Its market value is now $23bn, about 66% of the value it placed on Alibaba in the May deal.
Alibaba’s revenue rose to $2.3bn in the year ended September 30 2011, from $1.3bn a year earlier, according to Yahoo’s annual report in February.
The Chinese company posted a profit of $268m, compared with a loss of $10.7m a year earlier, according to the document.