‘Pay any price.’ Alibaba’s Jack Ma pushes for reforms as rival rocks e-commerce giant

Editor’s note: Sign up for CNN’s “Inside in China” newsletter for what you need to know about the country’s rise and its impact on the world.

Hong Kong CNN –

Alibaba founder Jack Ma has called for “change” as a competitor’s stellar performance raises eyebrows at his e-commerce company.

On Wednesday, the billionaire reacted to a recent rally in shares of PDD (PDD), the group behind Chinese online shopping giant Pinduoduo and U.S. retail newcomer Temu.

PDD reported blockbuster third-quarter results on Tuesday, beating analysts’ expectations. Revenue rose 94% year-on-year to 68.8 billion yuan (US$9.7 billion), while operating profit rose 60% year-on-year to nearly 16.7 billion US dollars (approximately 2.3 billion US dollar) increased.

That sent the company’s shares soaring dramatically in New York, rising 18% on Tuesday, another 2% on Wednesday and 4% on Thursday.

As a result, PDD’s market cap has risen to $195.9 billion, surpassing Alibaba’s (BABA) $190.5 billion. According to data provider Refinitiv Eikon, it is the first time that PDD has overtaken its older competitor.

Check out this interactive content on CNN.com

Alibaba employees had brought to attention. In a post on the company’s internal forum on Wednesday, an employee mentioned that PDD was approaching the Hangzhou-based group, prompting Ma to speak out, according to a person familiar with the matter.

“Please give us more constructive comments and suggestions, especially innovative ideas. I think everyone at Alibaba is watching and listening today,” he wrote in a comment, according to the source.

Ma further congratulated PDD on its recent strong performance, adding: “The era of AI e-commerce has just begun, and it is an opportunity and a challenge for everyone.”

“I firmly believe that Alibaba will change,” he wrote. “Everyone was great, but those who can reform for tomorrow and are willing to pay any price and sacrifice will be respected. Back to our mission and vision, Alibaba people, come on!”

Ma founded Alibaba in 1999. He resigned as the company’s chief executive in 2019, about a year before he ran afoul of Chinese authorities over his criticism of the country’s financial regulators and banks. Since then, the entrepreneur has kept a relatively low profile, but remains an Alibaba shareholder.

Shares of Alibaba have fallen 15% so far this year as the company struggles with concerns about a major restructuring, leadership change and tough competition.

Meanwhile, PDD has had a successful year. On Tuesday, Chairman and Co-CEO Chen Lei attributed the results in part to the recovery in China’s economy, which the company was “clearly feeling,” he said in an analyst conference.

PDD, founded in 2015, has also recently gained international attention with the launch of Temu, an affordable online superstore that has become extremely popular in markets such as the United States and Australia. Temu sells everything from home goods to clothing and electronics.