TLDRs;
- Jack Ma returns to Alibaba leadership, sparking a 2.52% stock jump and renewed investor optimism.
- Alibaba plans a $7B subsidy program to battle Meituan and JD.com in food delivery.
- Cloud revenue rose 26% in August, highlighting Alibaba’s push into AI and enterprise tech.
- Worker welfare becomes a new battlefield as Alibaba pledges benefits for millions of delivery riders.
Alibaba Group Holding Limited (NYSE: BABA) shares rose 2.52% to $162.02 on Tuesday after news broke that co-founder Jack Ma has stepped back into a more active role at the e-commerce giant.
This marks Ma’s most significant involvement since stepping down as chairman in 2019, a period during which he largely retreated from public view following a sweeping antitrust probe into China’s internet sector.
Sources close to the company revealed that Ma is now influencing key decisions at Alibaba, including a reported plan to deploy as much as 50 billion yuan (US$7 billion) in subsidies aimed at reclaiming market share from fierce rivals Meituan and JD.com.
Jack Ma’s Comeback Strategy
Ma’s renewed involvement signals a pivotal shift for Alibaba at a time when the company is navigating regulatory pressures, intensifying competition, and slower growth across China’s consumer economy.
He has reportedly requested frequent updates on Alibaba’s artificial intelligence initiatives and its expanding cloud business, signaling where he believes the company’s long-term opportunities lie. In August, Alibaba reported a 26% jump in cloud revenue, underscoring the segment’s importance in diversifying away from traditional retail operations.
The comeback also ties into the company’s food delivery battle. As of July, Alibaba’s Ele.me platform held a 43% market share, trailing Meituan’s 47%, according to Goldman Sachs. With billions earmarked for subsidies, Ma is betting that deep discounts and aggressive incentives can help narrow that gap.
$7B Subsidy Push and Rising Costs
The subsidy program highlights a costly “war of attrition” that has defined China’s food delivery landscape since 2018. Back then, Alibaba-backed Ele.me launched a $450 million “summer war” to undercut Meituan.
Today, those battles have ballooned, with Goldman Sachs estimating Alibaba could absorb losses of up to $5.7 billion in food delivery over the next year if spending continues at this pace.
Still, Ma appears convinced that the short-term hit is necessary to position Alibaba as a long-term leader. Subsidies are not only aimed at consumers but also at merchants, helping them offset operating costs and stay competitive in an increasingly crowded market.
Worker Welfare Becomes a Battleground
Alibaba’s recent moves also extend beyond discounts. Last month, Alibaba and Ant Group jointly launched a membership program that integrates services across 22 businesses, including Taobao, Tmall, Alipay, Ele.me, Freshippo, Fliggy, and Alibaba Cloud.
As part of the rollout, the company pledged to improve conditions for millions of delivery riders by offering new uniforms, healthcare funds, and educational support for workers’ families.
This shift underscores how welfare has become a new competitive frontier in China’s gig economy. Rivals such as JD.com and Meituan have also expanded social insurance coverage for riders, reflecting government pressure to improve labor standards in the sector.
Investor Confidence Reignited
Alibaba’s stock jump on Tuesday reflects renewed investor optimism that Jack Ma’s return could provide fresh strategic direction.
While the company’s market capitalization remains less than half of its 2020 peak, analysts suggest Ma’s presence may reassure investors that Alibaba is willing to make bold, long-term bets again.
Yet risks remain. The subsidy war could further erode profit margins, and the long-term sustainability of billions in incentives is unclear. Nonetheless, Ma’s renewed influence appears to be giving Alibaba the confidence it needs to compete head-to-head with Meituan and JD.com in its most contested markets.
