‘Pay any price.’ Alibaba’s Jack Ma urges reform as rival rattles e-commerce giant

By Michelle Toh and Laura He, CNN

Hong Kong (CNN) — Alibaba founder Jack Ma has called for “change” as the stellar performance of a competitor causes a stir at his e-commerce company.

On Wednesday, the billionaire responded to a recent rally in the stock of PDD (PDD), the group behind Chinese online shopping giant Pinduoduo and US-based retail upstart Temu.

PDD reported blockbuster third-quarter earnings Tuesday, smashing analyst expectations. Revenue soared 94% to 68.8 billion yuan ($9.7 billion) compared with the same period in the previous year, while operating profit surged 60% year-on-year to nearly $16.7 billion (about $2.3 billion).

That has pushed up the company’s stock in New York dramatically, taking it 18% higher Tuesday, another 2% higher Wednesday, and 4% higher on Thursday.

As a result, PDD’s market cap has soared to $195.9 billion, eclipsing Alibaba’s (BABA) $190.5 billion. It’s the first time PDD has surpassed its older rival, according to data provider Refinitiv Eikon.

Alibaba employees had taken notice. In a post on the company’s internal forum Wednesday, one staffer mentioned that PDD was closing in on the Hangzhou-based group, prompting Ma to weigh in, according to a person familiar with the matter.

“Please give us more constructive comments and suggestions, especially innovative ideas. I believe that everyone in Alibaba today is watching and listening,” he wrote in a comment, according to the source.

Ma went on to congratulate PDD on its recent strong performance, adding that “the era of AI e-commerce has just begun, and it is an opportunity and a challenge for everyone.”

“I firmly believe that Alibaba will change,” he wrote. “Everyone has been awesome, but those who can reform for tomorrow and are willing to pay any price and sacrifice are respected. Back to our mission and vision, Alibaba people, come on!”

Ma founded Alibaba in 1999. He stepped down as chairman of the company in 2019, about a year before landing in hot water with Chinese authorities for criticizing the country’s financial regulators and banks. Since then, the entrepreneur has kept a relatively low profile while remaining an Alibaba shareholder.

Alibaba’s shares have tumbled 15% so far this year as it battles concerns over a sweeping restructuring, a leadership shuffle and fierce competition.

Meanwhile, PDD has enjoyed a bumper year. On Tuesday, chairman and co-CEO Chen Lei attributed its results in part to the recovery of the Chinese economy, which he said on an analyst call was “clearly felt” by the company.

PDD, which was founded in 2015, has also recently attracted international attention for its launch of Temu, an affordable online superstore that has become hugely popular in markets such as the United States and Australia. Temu sells everything from home goods to apparel and electronics.

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