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Alibaba looks to restore image after CEO quits amid fraud case

Michael Kan | Feb. 22, 2011
Alibaba.com's CEO resigned Monday, hoping to restore the company's image after the Chinese e-commerce giant revealed how its suppliers had defrauded its customers -- but analysts say his abrupt departure only raises further questions about what is really going on.

The disclosure of the fraud cases, however, could still drive customers away from Alibaba.com. Not only did Alibaba.com fail to prevent the fraud with its protective measures, but members of its sales groups were found to be liable, said Ma Rongsong, an analyst at Analysys International. The fraud cases could now make it more of a challenge for Alibaba.com to become a supplier for small businesses overseas like in the U.S., Ma added.

The abrupt resignation of Wei as CEO, however, did seem strange to some. "It feels like there is more going on here," said Mark Natkin, managing director for Beijing-based Marbridge Consulting. "What's the last major scandal you can remember where the CEO claimed to have no direct involvement and then stepped down? In Japan, all the time. But here, in China, I just don't see it that much."

"The way this has played out is surprising and we feel like there might be more details to come," he added.

 

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