In a bid to drive growth and maintain its dominance in the fast-growing e-commerce sector, China's Alibaba Group has announced that CEO Eddie Wu will now head its core e-commerce business. This move comes as Alibaba faces increasing competition from online shopping rivals like Pinduoduo, who recently surpassed Alibaba in market value.

Eddie Wu will be replacing Trudy Dai, a longtime Alibaba executive and one of the founding employees of the company. In an internal letter dated Wednesday, Alibaba's chairman Joe Tsai stated that Dai will be instrumental in setting up an asset management company aimed at improving returns on capital and enhancing shareholder value.

The reshuffle in leadership comes at a critical time for Alibaba, as Pinduoduo, the operator of the online shopping platform of the same name, and the U.S.-focused e-commerce site Temu, have overtaken Alibaba in terms of market capitalization. Pinduoduo's U.S.-listed stock had a market capitalization of $199.41 billion, surpassing Alibaba's $191.75 billion as of Tuesday.

Jack Ma, the founder of Alibaba, recently praised Pinduoduo for its growth and success, acknowledging that the company needs a brand-new strategy and a change in its organizational principles and systems to adapt to the new environment. Chairman Tsai echoed this sentiment in his letter, emphasizing the need for a fresh approach to meet the challenges presented by Pinduoduo and other competitors.

The announcement of Eddie Wu taking the helm of the core e-commerce business seemed to have a positive impact on Alibaba's stock. On Wednesday, the company's Hong Kong-listed stock rose by 3.5% following the reshuffle news. This indicates investor confidence in Wu's ability to steer Alibaba's e-commerce business towards further growth and success.

It is worth noting that Alibaba had previously restructured its businesses in March, dividing them into six units with the intention of raising their own capital and eventually going public. The cloud unit was expected to be one of the first to hold an initial public offering. However, plans to spin-off the business were later scrapped due to uncertainties caused by U.S. export curbs on advanced chips used for artificial intelligence.

As Alibaba continues to navigate a rapidly evolving market and fierce competition, the company will need to devise innovative strategies and adapt to the changing landscape to maintain its position as a leader in the e-commerce industry. The appointment of Eddie Wu as the head of the core e-commerce business is a clear indication of Alibaba's commitment to addressing these challenges head-on.