Yesterday, was a significant day in the history of Alibaba. Jack Ma announced to the world that he will be succeeded by Jonathan Lu Xaoxi. Does the new heir apparent seem to be a new unknown? I tend to think so but Lu is Ma’s choice and that speaks volumes.

Lu, is like Ma one of the few Alibaba executives that has experience and knowledge of all 25 Alibaba businesses (a brief summary of the Alibaba holdings is seen below). That is significant as he will need to manage all of these holdings after they were all realigned to be separate businesses.

Lu has 2 distinct advantages over other Alibaba staff members. One, he is currently the leader of Aliyun, the mobile business inside Alibaba but has alsoled Alipay and Taobao. Alipay is the company that caused all the issues for Ma with Yahoo.

I have noticed something over the last 12 months, a high majority of CFO’s or staff with significant experience in online payments taking leadership roles at the top of ecommerce businesses in emerging markets. The major asset that Lu has is his experience as the CEO of Taobao. Taobao is the business that in my opinion will drive Alibaba’s growth in the next 5-10 years.

Lu will be in charge when Alibaba IPO’s, which will be a historical day. That is going to happen in the US and will be oversubscribed. Any investor worth his salt will be aware of the immense potential the Alibaba group has.

Barclays said recently Alibaba could be worth $55 billion.

“He has a very strong reputation and he has a very strong background in the e-commerce space,” said analyst Elinor Leung at Hong Kong-based brokerage CLSA.

“Ideally, you always want the founder to lead the IPO, but if the founder decides not to do it, Jonathan has a lot of experience,” Leung said.

I have a few questions over Ma’s new role. Is Lu going to be a separate voice once he takes over as Alibaba CEO or will Ma continue to lead Alibaba? The answer will determine how successful Alibaba will be in the coming years.

Lu has a few interesting tasks to do in the first year of his term as CEO(some maybe long term projects):

• Continue with the realignment of businesses as per the initial structural change made by Ma. I wonder how he will lead all 25 businesses. Have them all report directly to him or have the 25 businesses divided into functional groups?
• Continue with the logistics investment to ensure that the process completes as per Ma’s original plan in 2023.
• I would not be surprised if Alibaba also leverages some of its non-Chinese assets more. Vendio etc are all at the moment seemingly running as independent businesses and not providing any real value to Alibaba.
• Continue domination in Chinese ecommerce to ensure that Amazon, eBay and all other Western businesses do not take market share away from Alibaba.
• Potentially invest into startups that could help their ecommerce value chain. I am unaware of any startup competitions that Alibaba does. The identification of new talent and businesses to their value chain is of critical nature to mature ecommerce businesses like Alibaba.
• Potentially competing against Rakuten in Asia. I cannot see any reason why Alibaba would not look at assets in South East Asia (SEA) or Japan?
• Maybe potentially acquire businesses from Rocket Internet. Lazada would provide access for Alibaba into SEA. This does not seem plausible right now but I think down the line Rocket Internet might be very keen to sell Lazada to either Rakuten or Alibaba.
• Maybe also sell their scalable commerce solution to other Asian businesses or any ecommerce business for that matter.
• Continue to ensure that Chinese New Year is the biggest single day in ecommerce globally. I am fully aware that scale will ensure that Alibaba will break all kinds of records.
• Ensure that 360buy continues to spend millions on customer acquisition costs. At the moment I cannot see any reason or way for 360buy to gain market share from Alibaba.
• Continue to develop Alibaba staff.  Lu will have to ensure that he has a generation in the wings to continue the domination in China. I believe strongly that in the next 5 years we will see Alibaba becoming a global competitor for Amazon. They will enter other markets.
• Continue on the road to becoming the biggest ecommerce business in the world.

The Current Alibaba Leadership:

At the moment Lu will continue to be an mysterious Alibaba staff member. From the 10th of May the spotlights will be on him.