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Why Alibaba's new hire may add wings to its global push

Qilai Shen | Bloomberg | Getty Images

Appointing a former Goldman Sachs banker as president could give a much-needed boost to the overseas ambitions of Chinese e-commerce giant Alibaba, experts told CNBC.

Michael Evans, who spent 20 years at Goldman Sachs in positions including vice chairman and chairman of Asia, will oversee Alibaba's international expansion, reporting to the group's CEO Daniel Zhang. The ex-banker's focus will be on building partnerships with big brands and retailers in Europe, America and Asia in order to help them sell in China's massive consumer market.

"They are appointing a very experienced executive who will report directly to the chairman [and that] indicates a high emphasis on the international business where they have a huge opportunity. This will make sure they capitalize on it," Gil Luria, managing director of Wedbush Securities, told CNBC.

There is rapidly growing appetite among Chinese consumers for the latest goods from international brands. According to a report by eMarketer, overseas purchases by China's online shoppers grew to more than $20 billion last year from less than $2 billion in 2010. But Alibaba faces increasing competition to serve this demand from rival JD.com, which got beauty retailer Sephora on board in May and recently announced a partnership with American singer Taylor Swift to sell her new fashion line designed specifically for Chinese shoppers.

Meanwhile, Alibaba's attempts to introduce its own sales platform to overseas markets has had mixed results. Earlier this year, it sold its U.S. online shopping site 11 Main, highlighting the struggle the company had in mature markets dominated by the likes of Amazon and eBay. The prevalence of counterfeit goods on Alibaba's platform has also complicated its efforts to woo prestigious foreign brands.

"Evans is not going to singlehandedly right the ship but he's a [valuable] addition to an already strong management team," S&P Capital IQ's analyst Scott Kessler said.

"If you look at Evans' background, he's been involved with China for a couple of decades. he has extensive international experience. [While] Alibaba sees China as critical to what they are doing now, if they want to be a truly global player they need to have a significant presence, relationship and business outside China and i think that's going to be what he is focusing on," Kessler added.

Benjamin Cavender from China Market Research (CMR) echoes that sentiment: "It seems that the decision to bring in Evans shows that Alibaba knows it has a credibility problem. If he can convince reluctant brands that Alibaba is serious about cleaning up its marketplace then this will work well. Additionally, his background at Goldman suggests that he will be able to communicate well on issues related to Alibaba's stock price which could be helpful for Alibaba in the U.S. from a public relations perspective."

The 57-year-old will retain his seat on the company's board, which he took in September when Alibaba launched its initial public offering (IPO).

The logo and mascot 'Ali cattle' stand outside the headquarter of Alibaba Group in Hangzhou.
Zhang Peng | LightRocket via Getty Images
The logo and mascot 'Ali cattle' stand outside the headquarter of Alibaba Group in Hangzhou.

However, CMR's Cavender also described the decision to appoint an insider to the influential new role as a "double edged sword."

"On the plus side, Evans has been around long enough to know the senior people and to have built trust within the organization. This is important given that he'll have a very high-profile role," Shanghai-based Cavender wrote in an email reply to CNBC.

"On the other hand, bringing in outsiders would have been a good way to bring about change, assuming they can get the right people. In this case, I think Alibaba recognizes the problem but haven't really prioritized it," he added.

Following the announcement, shares of New York-listed Alibaba closed up 1.2 percent to $78.92 on Tuesday.

CORRECTION: An earlier version of this article incorrectly attributed Benjamin Cavender's comment on Alibaba's perceived credibility problem to Scott Kessler.