Alibaba Group Holding Ltd (BABA) Suffered Setback After Ali Health Coo Zhang Shouchuan Resigned


Alibaba Group Holding Ltd (NYSE:BABA) suffered a big setback following the resignation of COO, Zhang Shouchuan, from its Ali Health on Monday. The resignation comes just about five days after the company unveiled its new healthcare subsidiary. It only appears that the company is facing compounding issues as far as the healthcare segment was concerned. The company was keen to enter the medical online services segment.

Revokes License

The worst that Alibaba Group Holding Ltd (NYSE:BABA) faced now was the revocation of license issued by the Chinese health regulators. The e-commerce firm wanted to track, as well as, monitor electronically data on pharmaceutical products. In fact, its CEO, Jack Ma, claimed during the launch of Ali Health, that the doctors would be out of business through the integration of the consumers’ medical data requirements. It was also intended to integrate institutional, as well as financial deals through the mobile app besides cloud computing infrastructure.

Apart from Jack Ma’s claims, the company wanted to use customer data for its e-commerce purposes, which was its familiar territory.

The sudden departure of Zhang has unavoidably led to a practical assessment of Alibaba Group Holding Ltd (NYSE:BABA)’s commercial viability of its health subsidiary. This was despite the fact that it could attract over 50,000 retailers in pharmaceutical to 20 online sales platforms covering 200 cities. These cities would have a population of 500 million people.

Healthcare’s Future

The resignation of Zhang, who was termed as one of the few persons with a clear-cut vision to lead from the front, would cast a shadow on the company’s future. Rumors indicated that Zhang’s swift was due to the gloomy outlook for the near term. However, with its brand image, the company could still get along with the business.

Chinese Premier, Li Keqiang, assured the nation that the government would take every step to ensure smooth sailing for businesses in its innovation, which included healthcare sector. However, industry observers indicated that high barriers of entry may not be breached by Ali Health overnight since it would need the government’s support.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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