E-commerce giant Alibaba Group Holding Ltd. named a new CEO and posted a 45% increase in revenue for the three months through March.
Daniel Zhang will become CEO on May 10, replacing Jonathan Lu, who will remain on the board as vice chairman, the company said Thursday. The change was announced as Alibaba's sales rose to $2.8 billion in the quarter that closed March 31, beating analysts' estimates. The company makes most of its revenues from selling ads within its ecosystem, but it did not provide specific figures on that performance.
Alibaba's results helped ease fears that revenue growth was slowing as China's economy cools. The stock had also been falling out of favor from investors after Chairman Jack Ma said last month that there would be a hiring freeze and after the Chinese government criticized the company's business practices.
Shares of Alibaba climbed as much as 12% to $89.29 in New York, heading for the biggest gain since September. The stock had slumped 23% this year through Wednesday. Shares in the September initial public offering were sold at $68 apiece, raising a record $25 billion.
Mr. Ma elevated Mr. Zhang after the chief operating officer helped turn the annual Nov. 11 shopping promotion into the company's biggest sales event. Last year Alibaba sold $9.3 billion in merchandise during the 24-hour festival.
"Daniel is a proven international business leader and innovator with a strong track record of delivering results," Mr. Ma said.
Net income fell 49% to $467 million, the company said. Adjusted net income, which excludes some items, rose 16%.
Mr. Zhang, 43, joined Alibaba as chief financial officer of Taobao Marketplace in August 2007 and has been COO since September 2013. The change is being made because Alibaba wants to promote young talent, Executive Vice Chairman Joseph Tsai said on a conference call.
Outgoing chief executive Mr. Lu, 45, had joined Alibaba in 2000 and replaced Mr. Ma as CEO two years ago.
Alibaba is trying to diversify its businesses while simultaneously tapping more of the 557 million Chinese who access the Internet from their smartphones and tablets. Alibaba announced at least $2.4 billion in investments the past 12 months, including a Chinese soccer team, smartphone maker and mobile application for hailing taxis.
The company's overseas strategy has seen it start e-commerce sales in Russia, Brazil and India through a service called AliExpress.
Mr. Ma has set a goal of getting 50% of sales from outside China as it expands beyond the country's urban areas. That effort comes as the nation's economy is projected to grow at its slowest pace since 1990.
Online commerce from China accounted for 80% of total revenue in the March quarter, while international e-commerce sales were just 9% the company's total, Alibaba said.
As it deals with the slowing Chinese economy, Alibaba also is battling criticism from the government. In January, a report by the State Administration for Industry & Commerce accused Alibaba of allowing merchants to operate without required business licenses, to run unauthorized stores that co-opt famous brands and to sell fake wine and handbags.
-- Bloomberg News, with Ad Age staff --