For the new CEO, maintaining business growth may be of utmost importance.

Original ? New Entropy

Author | Yiman, Editor | Longkui

"The future is challenging, but we are fortunate to participate in shaping and creating it together."

On December 8th, Alipay and Ant Group celebrated their 20th anniversary. Jack Ma, who had not appeared in public for a long time, also showed up at the Ant campus that evening to participate in the event, causing the audience to go wild during his on-site speech. Jack Ma said, "Today, I am not here for Ant's past 20 years, but for Ant's next 20 years."

Jack Ma shared his thoughts on new technologies and trends with Ant employees: "Twenty years ago, when the internet first arrived, our generation was fortunate to seize the opportunities of the internet era. However, looking ahead, the next 20 years will bring about tremendous changes due to the AI era, surpassing everyone's imagination."

"AI will change everything, but that doesn't mean AI will decide everything. Technology is indeed important, but what will truly determine success in the future is what valuable and unique things we do today for this upcoming era." He said.

At the end of last month, Jack Ma also appeared at the Alibaba Xixi campus. Multiple netizens shared photos of encountering Jack Ma in Area C of the campus. Although Jack Ma announced his retirement five years ago, as the soul of Alibaba, every appearance of his seems to foreshadow upcoming changes.

Prior to Jack Ma's latest appearance, Alibaba had just announced a new organizational change - the establishment of the Alibaba E-commerce Business Group, with Jiang Fan appointed to lead and report to Wu Yongming.

At Ant Group's 20th anniversary event, where Jack Ma was present, Ant Group also announced new senior personnel changes. Ant Group Chairman and CEO Jing Xiandong announced in a letter to all employees that Han Xinyi, President of Ant Group, would officially take over as CEO of Ant Group from March 1, 2025, taking full responsibility for all Ant business operations and daily management, reporting to Jing Xiandong and the board of directors.

Ant Group has a tradition of grooming young successors. In 2016, Peng Lei, then Chairman and CEO, handed over the CEO position to Jing Xiandong, describing the transition in the appointment email as a "continuous flow of confident talent." This handover is based on a "solid talent foundation and strong confidence in organizational inheritance."

Public information shows that Han Xinyi joined Ant Group in May 2014 and has been with the company for over a decade, serving as Vice President of Strategic Investments, CFO, and Executive Director of the Board. In March 2024, he was appointed President of Ant Group.

As early as March this year, Ant Group announced its largest internal business restructuring since 2020. Ant International, distributed database brand OceanBase, and Ant Digital Technology, the three major business innovation segments, have entered the market as independently operated subsidiaries, each establishing their own board of directors and implementing a CEO responsibility system under the leadership of the board. Han Xinyi was appointed President of Ant Group.

In his letter to all employees, Jing Xiandong stated that this organizational upgrade aims to further accelerate reform and promote Ant's three major strategies: "AI First," "Alipay's Dual Flywheel," and "Accelerated Globalization."

According to the 21st Century Business Herald, industry observers believe that splitting business segments allows each department to focus more on their respective businesses, respond quickly to market changes, and further prepare for potential independent listings in the future.

However, similar to Alibaba's "1+6+n" organizational structure change, each independently operated company now bears greater responsibility, and the pressure of business models and profitability has become apparent.

Financial data disclosed by Ant Group in 2020 revealed that its revenue composition included digital payments and merchant services, digital financial technology services, and innovative businesses and others. From January to June of the same year, the proportions of these three major businesses were 35.86%, 63.39%, and 0.75%, respectively. In other words, innovative businesses like Ant Digital Technology accounted for less than 1% of revenue four years ago.

Data disclosed by OceanBase on October 23 showed that after four years of commercialization, its customer base surpassed 2,000, with customer growth exceeding 100% for four consecutive years. While no latest revenue figures were provided, for reference, OceanBase's revenue in the financial industry last year reached 270 million yuan. On the afternoon of October 23, Yang Bing, CEO of OceanBase, stated that the team's primary KPI is to aim for an IPO within 3-5 years.

During the 2024 Bund Summit, Zhao Wenbiao from Ant Digital Technology revealed that the company strives to achieve break-even by the end of this year. It is predicted that the company's business will grow several times over the next 2-3 years. While there is no specific timeline for an IPO, it is clear that several conditions must be met - profitable operations, stable growth, and a clear growth trend. When these conditions are met, an IPO will naturally follow.

Under the "AI First" strategy, Ant Group has been active in the field of AI.

In November 2023, Ant Group released the Bailing large model. In September this year, Han Xinyi, President of Ant Group, revealed that Ant would launch three new AI products at the 2024 Bund Summit: "ZhiXiaoBao" (AI Life Assistant), "MaXiaoCai" (AI Financial Assistant), and "AI Health Assistant." In November this year, it was reported that Ant Group had established a reinforcement learning laboratory, with Wu Yi, founder of the large model startup Biansai Technology, joining as the laboratory's Chief Scientist.

Before news of the collaboration with Biansai Technology emerged, "LatePost" reported that Ant Group had invested in at least six companies in the AI sector, including large model companies Zhipu AI and Moon's Dark Side, video generation companies Aishi Technology and Shengshu Technology, and AI chip companies Moxin and Meta.

Against the backdrop of "interconnectivity," Alipay is facing more comprehensive market competition in the payments market. On July 8th this year, Alipay announced an upgrade to barcode payments, introducing "Alipay Tap." The innovation of Tap lies in providing a new interactive possibility. Li Jiajia, Vice President of Alipay at Ant Group, once said, "Young people determine the future of business. 'Tap' offers a natural experience for the younger generation and is the best entry point for merchants to connect with business opportunities over the next two decades."

Alibaba's third-quarter financial report shows that, based on the investment gains and losses calculated using the equity method, Ant Group contributed a profit of 2.478 billion yuan to Alibaba in the third quarter of this year, compared to 846 million yuan in the same period last year.

Since Alibaba adopts a strategy of recognizing investment gains and losses with a one-quarter lag, Ant Group's revenue lags behind by one quarter. Based on Alibaba's 33% stake in Ant Group, Ant Group achieved a net profit of approximately 7.51 billion yuan in the second quarter of 2024, representing a year-on-year increase of 192.9% compared to the 2.564 billion yuan in the second quarter of last year.

Previously, Ant Group achieved a net profit of approximately 11.87 billion yuan in the first quarter of 2024, a year-on-year decrease of 10%. In 2023, Ant Group's net profit was approximately 23.8 billion yuan, a decrease of 23.7% compared to 2022.

It is evident that Ant Group's operating conditions are continuously improving. For Han Xinyi, maintaining business growth may be of utmost importance.

Below is the full text of Jack Ma's speech:

"Dear Ant Group members, good evening, everyone. I am delighted to celebrate Alipay's 20th anniversary with you all. Over the past 20 years, you have created Alipay, Yu'ebao, and Ant Forest from nothing, participating in social development and construction through our own efforts and methods. On behalf of the original founding group, I salute Alipay, salute Ant Group, and wish Ant Group well.

Today, I am not here for Ant Group's achievements over the past 20 years, but for Ant Group's next 20 years. Each era presents different opportunities and challenges to each generation. However, not everyone can seize those opportunities.

Twenty years ago, when the internet first arrived, our generation was fortunate to seize the opportunities of the internet era. However, looking ahead, the next 20 years will bring tremendous changes due to the AI era, surpassing everyone's imagination. Because the AI era will be an even greater era. AI will change everything, but that doesn't mean AI will decide everything. Technology is important, but what will truly determine success in the future is what valuable and unique things we do today for this upcoming era."

"What we can do today and in the future is still rooted in what we have adhered to over the past 20 years - bringing happiness and change to the lives of ordinary people through technology. We must empower our passions with AI, and we must also empower our AI with passion."

"You cannot see the rainbow without going through the storm. I am grateful for the experiences and trials of the past years. I am also grateful to all the friends who have believed in, loved, helped, and supported Ant Group over the years. I am thankful for your encouragement and even more so for your criticism towards Ant Group over these years."

"It is precisely this encouragement and criticism that have helped Ant Group grow and mature. They are also crucial guarantees for Ant Group to move forward more steadily and further in the future."

"I believe that with a new chapter opened, a group of passionate and righteous young people living in an era of change will certainly create more and newer miracles.

"The future is challenging, but we are fortunate to participate in shaping and creating it together. Thank you all."