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Wu,
who sent the letter on Tuesday, his third day in the top job,
also said Alibaba would focus on promoting young employees,
specifically citing those born after 1985, to form the core of
its business management teams within the next four years.
This would help maintain a "start-up mindset" and prevent the
company getting "stuck in our old ways", he said.
The new CEO, one of Alibaba Group's founders and long-time
lieutenant of former chief Jack Ma, is laying out his strategic
priorities at a key moment for Alibaba, which is undergoing the
biggest organisational restructure of its 24-year history.
Late on Sunday Alibaba also announced that Wu would concurrently
serve as CEO of its cloud computing unit, replacing Daniel
Zhang.
The news came as a surprise to many, as Zhang had said in June
he was stepping away as CEO of Alibaba Group to focus on the
cloud division, which is aiming to have an IPO by May 2024.
The Cloud Intelligence Group, valued at $41 billion to $60
billion this year, is among five units Alibaba is spinning off
as part of its restructuring.
The cloud unit is Alibaba's second-biggest revenue source after
domestic e-commerce and houses the group's generative artificial
intelligence model, Tongyi Qianwen.
"Over the next decade, the most significant change agent will be
the disruptions bought about by AI across all sectors," Wu said
in the letter.
"If we don't keep up with the changes of the AI era, we will be
displaced."
Alibaba beat analyst expectations in its first-quarter earnings
report last month, but its recovery from a two-year regulatory
crackdown has been complicated by the dual challenges of rising
competition and a slowing Chinese economy.
Economic headwinds have helped drive more domestic e-commerce
consumers to low-cost platforms, such as PDD Holdings Pinduoduo
and ByteDance's Douyin, the Chinese version of TikTok, prompting
Alibaba's domestic e-commerce arm to focus on value for money
segments.
The cloud unit reported revenue growth of 4% for the quarter,
the smallest among the group's six business units, but analysts
estimate it is China's largest cloud provider with a 34% market
share, ahead of Huawei Technologies, Tencent Holdings and Baidu.
(Reporting by Casey Hall; Editing by Gerry Doyle and Stephen
Coates)
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