Jack Ma has formally confirmed his retirement from Alibaba Group Holding Ltd., detailing plans on passing control to CEO Daniel Zhang in 2019.

Ma, Asia’s richest man, plans to exit on his 55th birthday next year, but will remain on the Alibaba board until 2020. He plans to focus on philanthropy and education, he said in a statement. He also mentioned unspecified “new dreams” in his statement, which leaves open the door for a potential expansion into Hollywood or fields.

Alibaba was founded by Ma in 1999 and grew into an e-commerce giant that gradually moved into brick and mortar retail and other investments. He appointed Zhang as CEO in 2015.
“Starting the process of passing the Alibaba torch to Daniel and his team is the right decision at the right time, because I know from working with them that they are ready,” Ma said. “Since he took over as CEO, he has demonstrated his superb talent, business acumen and determined leadership.”

Alibaba transformed how the Chinese people shop and make purchases, and made Ma the richest man in the world’s most populous country. His net worth is estimated at $40 billion.

Ma is retiring at a time internet companies like Alibaba have fallen under tighter government scrutiny, as the industry plays an increasingly important role in the country’s economy. He is the first among a generation of Chinese internet entrepreneurs to leave the companies they’ve founded.

News of the executive’s departure comes amid a tumultuous period the industry. Liu Qiangdong, the billionaire founder of online retailer JD.com, was arrested on rape charges last week on a business trip to Minneapolis. Another Chinese internet giant, Tencent Holdings, which owns some of the biggest game franchises in the world, posted a rare drop in profits last month as it confronts tighter government regulations.

Ma recognized an opportunity in 1999 to play matchmaker for small and medium-size Chinese manufacturers, which lacked access to other businesses around the globe that were looking for products as varied as bamboo toothpicks, bath towels and machine tools.

The company took off in 2003 with the launch of the Taobao marketplace, where merchants sold directly to consumers. Online payment service Alipay helped speed these transactions in a country where few people had credit cards.

In its most recent quarter, Alibaba reported a 60% increase in sales even though profits fell. Its annual revenues approach $40 billion.

Alibaba sought closer ties to Hollywood in recent years. It took a minority equity stake in Steven Spielberg’s Amblin Partners, announcing plans to co-produce and finance films for global and Chinese audiences. Before that, Alibaba Pictures had invested in tentpoles such as Paramount/Skydance’s Mission: Impossible – Rogue Nation as well as Teenage Mutant Ninja Turtles: Out Of The Shadows and Star Trek Beyond.

The company’s head of Alibaba Digital Media & Entertainment Group outlined an aggressive growth strategy that anticipated spending$7.2 billion on content through 2019.  Alibaba also has holdings in media assets, such as the South China Morning Post and a Twitter-like social media site Weibo.

Ma made headlines in the U.S. after meeting with president-elect Donald Trump and promising to bring one-million small U.S. businesses onto his platform to sell goods to Chinese consumers.

Below is Ma’s resignation letter:

Dear Alibaba customers, Aliren, and shareholders,

Today, as we mark the 19th anniversary of Alibaba, I am excited to share some news with you: with the approval of our board of directors, one year from today on September 10, 2019 which also falls on Alibaba’s 20th anniversary, Group CEO Daniel Zhang will succeed me as chairman of the board of Alibaba Group. While remaining as executive chairman in the next 12 months, I will work closely with Daniel to ensure a smooth and successful transition. Thereafter, I will stay on the Alibaba board of directors until our annual shareholders meeting in 2020.

I have put a lot of thought and preparation into this succession plan for ten years. I am delighted to announce the plan today thanks to the support of the Alibaba Partnership and our board of directors. I also want to offer special thanks to all Alibaba colleagues and your families, because your trust, support and our joint enterprise over the past 19 years have prepared us for this day with confidence and strength.

This transition demonstrates that Alibaba has stepped up to the next level of corporate governance from a company that relies on individuals, to one built on systems of organizational excellence and a culture of talent development.

When Alibaba was founded in 1999, our goal was to build a company that could make China and the world proud and one that could cross three centuries to last 102 years. However, we all knew that no one could stay with the company for 102 years. A sustainable Alibaba would have to be built on sound governance, culture-centric philosophy, and consistency in developing talent. No company can rely solely on its founders. Of all people, I should know that. Because of physical limits on one’s ability and energy, no one can shoulder the responsibilities of chairman and CEO forever.

We asked ourselves this question 10 years ago – how could Alibaba achieve sustainable growth after Jack Ma leaves the company? We believed the only way to solve the problem of corporate leadership succession was to develop a system of governance based on a unique culture and mechanisms for developing consistent talent and successors. For the last 10 years, we kept working on these ingredients.

Having been trained as a teacher, I feel extremely proud of what I have achieved. Teachers always want their students to exceed them, so the responsible thing to do for me and the company to do is to let younger, more talented people take over in leadership roles so that they inherit our mission “to make it easy to do business anywhere.” Carrying out this mission in order to help small businesses, young people and women around the world is my passion. This is not only our intent from day one but I feel blessed to have this opportunity. To realize the dream behind this mission requires participation by a lot more people than just Jack Ma and persistent effort by generations of Aliren.

Alibaba is amazing not because of our business or scale or accomplishments. The best thing about Alibaba is that we come together under a common mission and vision. Our partnership system, unique culture and talented team have laid a strong foundation for the legacy of our company. In fact, since I handed over the CEO’s responsibilities in 2013, the company has run smoothly for five years on the back of these institutional ingredients.

The partnership system we developed is a creative solution to good governance and sustainability, as it overcomes several challenges faced by companies of scale: continuous innovation, leadership succession, accountability and cultural continuity. Over the years, in iterating our management model, we have experimented with and improved on the right balance between systems and individuals. Simply relying on individuals or blindly following a system will not solve our problems. To achieve long-term sustainable growth, you need the right balance among system, people and culture. I have full confidence that our partnership system and efforts to safeguard our culture will in time win over the love and support from customers, employees and shareholders.

Since the founding of the company in 1999, we have been of the view that Alibaba’s future will need to depend on “droves of talent” to enable us to iterate on our management succession plans. After years of hard work, today’s Alibaba has a world-class talent pool in quality and quantity. The teacher in me feels extremely proud of our team, our leadership and our unique mission-driven culture, as well as the fact that we continue to develop exceptional business leaders and professional talent like Daniel Zhang.

Daniel has been with Alibaba Group for 11 years. Since he took over as CEO, he has demonstrated his superb talent, business acumen and determined leadership. Under his stewardship, Alibaba has seen consistent and sustainable growth for 13 consecutive quarters. His analytical mind is unparalleled, he holds dear our mission and vision, he embraces responsibility with passion, and he has the guts to innovate and test creative business models. Deservedly, China’s business news media has named him the No.1 CEO in 2018. For these reasons, he and his team have won the trust and support of customers, employees and shareholders. Starting the process of passing the Alibaba torch to Daniel and his team is the right decision at the right time, because I know from working with them that they are ready, and I have complete confidence in our next generation of leaders.

As for myself, I still have lots of dreams to pursue. Those who know me know that I do not like to sit idle. I plan on continuing my role as the founding partner in the Alibaba Partnership and contribute to the work of the partnership. I also want to return to education, which excites me with so much blessing because this is what I love to do. The world is big, and I am still young, so I want to try new things – because what if new dreams can be realized?!

The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.

Jack Ma
September 10, 2018