Author: Liu BaodanEditor: Zhang XiaolingAlibaba, the most dazzling internet company in China for over 20 years, has encountered a different kind of dilemma in 2023. It has been fined, split up, experienced app crashes, and faced personnel changes. It seems to be going through a period of setbacks, with its former glory gradually fading.On December 29th, a statement unveiled the eight-year-long feud between JD.com and Alibaba.JD.com announced on its official Weibo account that, according to the judgment of the Beijing Higher People's Court, Alibaba's abuse of its dominant market position through the &#34;choose one of two&#34; practice constituted monopolistic behavior. Alibaba was ordered to compensate JD.com with 1 billion yuan.Soon after, JD.com decided to distribute the 1 billion yuan in red envelopes during its New Year's Eve gala, while Alibaba chose to remain silent.This is not the first time Alibaba has been fined. In 2021, the State Administration for Market Regulation imposed a fine of 18.228 billion yuan on Alibaba, the highest penalty ever issued by China's anti-monopoly authorities.In July 2023, the financial regulatory authorities imposed a fine (including confiscation of illegal gains) of 7.123 billion yuan on Ant Group and its subsidiaries, the largest penalty in the history of China's financial regulation.In the past few years, regulatory agencies have adopted a principle of &#34;prudent tolerance&#34; towards internet companies. However, as the industry has developed, market competition issues have gradually received more attention. As a giant, Alibaba has become the focus of regulation.The severity of Alibaba's penalties is also rare globally. The 18.2 billion yuan fine is second only to the two fines imposed on Google in 2017 and 2018, which amounted to 4.3 billion euros (about 33.6 billion yuan) and 2.4 billion euros (about 18.8 billion yuan), respectively.The hefty fines not only affect Alibaba's financial performance but also cast a shadow over its future prospects.In 2020, Alibaba's market value reached its peak at $858.1 billion and has since declined. As of January 2, 2024, Alibaba's market value has fallen by 77.8%, evaporating $667.7 billion (about 4.78 trillion yuan), leaving only $190.4 billion (about 1.36 trillion yuan).Alibaba is still Alibaba, but the environment has changed. In addition to regulatory policies, Alibaba needs to face increasingly fierce market competition.Over 20 years ago, Jack Ma pioneered e-commerce in China. Taobao changed people's shopping habits and the way Chinese people do business. Alibaba built a massive e-commerce empire in a completely blank market, making it the most successful internet company.In 2014, Alibaba went public on the New York Stock Exchange, raising a record-breaking $25 billion in IPO financing. It was the pinnacle of Alibaba's development, attracting global attention.However, after nearly a decade of development, the growth rate of the e-commerce industry has slowed down, and more players have entered the market. E-commerce has become a highly competitive red ocean, especially with the rise of new players such as Pinduoduo and Douyin. Alibaba's successful business model has been challenged, and its market position has been continuously declining.According to a research report by Goldman Sachs Global Investment, the market share of Taobao and Tmall has decreased from around 66% in 2019 to about 44% in 2022.Insiders can't help but feel that first it was Pinduoduo, then it was live-streaming e-commerce, and Alibaba's market share is being gradually eroded.This decline reached its peak on November 30, 2023, when Pinduoduo's market value reached $195.887 billion, surpassing Alibaba with a lead of $3.1 billion, making it the largest Chinese concept stock in the U.S. stock market. This means that a new king has emerged in the e-commerce industry, and Alibaba's position has been overturned.This is a showdown between an established e-commerce company and an emerging one, with the latter's high growth potential determining its value.From the financial report, Taotian achieved a revenue of RMB 97.665 billion in the second quarter of last year, a year-on-year increase of 4%, while Pinduoduo's revenue during the same period was RMB 68.84 billion, a year-on-year increase of 94%, far exceeding market expectations. In terms of revenue, Alibaba's revenue is still 1.4 times that of Pinduoduo.Alibaba employees are obviously dissatisfied. A former Alibaba employee is puzzled, &#34;This is not logical. Are Alibaba Cloud, DingTalk, Cainiao, Hema, Gaode, and Ele.me all worth nothing? Pinduoduo has TEMU, but Alibaba also has Lazada, AliExpress, and others. How can its market value be so low?&#34;He believes that there may be a possibility that Alibaba's market value is underestimated, and there is still a question mark.Beyond the considerations of the capital market, what is more important is whether Alibaba can adapt to the new era and make changes.On the eve of Pinduoduo's market value surpassing Alibaba, Jack Ma made a rare comment on the internal network, saying, &#34;I firmly believe that Alibaba will change, Alibaba will improve.&#34; He said that all great companies are born in winter, and the era of AI e-commerce has just begun, which is an opportunity and a challenge for everyone.In fact, since 2023, Alibaba has been seeking breakthroughs and reawakening its entrepreneurial mindset.In March of last year, Alibaba underwent the largest organizational transformation in history, &#34;One Split into Six,&#34; and the independent Taotian will be more focused. In May, Jack Ma pointed out the direction of returning to users for Taotian's development. In November, the new CEO, Wu Yongming, clarified the strategic blueprint for the new development stage, with three priority directions for the future: technology-driven internet platform business, AI-driven technology business, and globalized business network.Alibaba has also experienced the most drastic personnel changes in history, with a major overhaul of its core management team.Since September 2023, the core management team represented by Cai Chongxin and Wu Yongming has taken over Alibaba in an all-round way. Wu Yongming also serves as the CEO of Alibaba, Taotian, and Alibaba Cloud, consolidating Alibaba's core power.As one of Jack Ma's most trusted people, Wu Yongming is one of the earliest Alibaba partners who followed Jack Ma. For the past eight years, he has been involved in investment business. Insiders at Alibaba believe that Wu Yongming, who has returned without historical burdens, can carry out reforms boldly.On December 22, Wu Yongming formed a brand-new team represented by post-80s young people. In addition to selecting people from within Taotian, he also drew elites from departments such as Ele.me and Quark. Such decisive actions also show the determination of Alibaba's change to the outside world.Looking back at 2023, Alibaba has experienced significant turbulence, intensified competition in the external e-commerce market, being surpassed in market value, and the emergence of a new king. The internal business has been split and independent, the core leadership has changed, and the personnel organization is undecided. The future is likely to continue to evolve dynamically.Many internet professionals lamented that just five or six years ago, no one could have imagined that the benchmark internet giant Alibaba would find itself in its current predicament, as if everything they did was wrong, as if the glory of the past 20 years had vanished into thin air, and Alibaba was no longer the company that graduates eagerly sought to join.There are no successful companies, only companies of their time. After Jack Ma's complete retirement and the tumultuous split of Alibaba, the year 2024 will be particularly worth observing for Alibaba and the industry. Where will Daniel Zhang lead Alibaba? This will be a crucial year, and time will provide the answer.

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2023, BABA-SWR in a state of sorrow and distress.