Alibaba executive, considered CEO's potential successor, demoted over improper behaviour

SHANGHAI: A top executive of Alibaba Group Holding Ltd, Jiang Fan, has been demoted over allegations of improper behaviour following an internal investigation, according to a person familiar with the matter.

Jiang — the president of Alibaba's marketplaces Taobao and Tmall who joined the Chinese e-commerce giant in 2013 and was long considered the incumbent CEO Zhang Yong's potential successor — was removed from a partnership of 38 people, which appoints some board members. 

It also demoted him to group vice president from group senior vice president, said the person, who asked not to be identified discussing internal matters.

Alibaba declined to make Jiang available for interview and he did not respond to a Reuters request for comment.

The decision follows speculation on Chinese social media about Jiang’s relationship with a prominent social media influencer, Zhang Dayi, and whether he had used his influence at Alibaba to ensure preferential treatment to merchants associated with Ruhnn Holding Ltd, an e-commerce company where Zhang serves as Chief Marketing Officer.

A spokesperson for Ruhnn declined to comment. A representative for Zhang did not immediately respond to a request for comment.

In 2016, Alibaba had bought a stake in Ruhnn, which went public last year.

In its internal investigation, Alibaba concluded that its investment in Ruhnn "has nothing to do with Jiang Fan” and that Ruhnn stores had not benefited from Jiang’s influence, according to a note to all staff seen by the person.

But the note also said that due to "inappropriate handling of family affairs,” Jiang had "triggered a serious public opinion crisis, which created a major impact on the company’s reputation”, according to the memo.

The online furore about Jiang comes as Alibaba recovers from the impact of the coronavirus, which saw deliveries temporarily come to a halt as the country went into a nation-wide, weeks-long state of semi-quarantine.

Jiang had joined Alibaba after selling his app analytics company Umeng to the e-commerce giant and is credited with boosting the company's transition away from the desktop and towards purchases on mobile phones.

He was seen by some as a potential successor to current chief executive, Zhang Yong, who took over Alibaba from Jack Ma formally in 2019.