Alibaba combines e-commerce arms to tackle growing competition
Technology
Alibaba combines e-commerce arms to tackle growing competition
SHANGHAI (Reuters) - Alibaba Group will integrate its domestic Chinese and international e-commerce platforms into a single business unit run by one leader for the first time, the company said in a stock exchange filing on Thursday.
The Alibaba E-commerce Business Group, as the unit will be called, brings together the Taobao and Tmall Group and the Alibaba International Digital Commerce (AIDC) Group.
AIDC groups cross-border player AliExpress, wholesale B2B site Alibaba.com and other regional platforms operating in different parts of the world, from Southeast Asia to Turkey.
Its chief, Jiang Fan, a former head of Tmall demoted in 2020 after an online scandal, has been tapped to lead the new unit, reporting to Alibaba Group Chief Executive Eddie Wu.
Wu announced the new business unit in a letter to employees posted on Alibaba's intranet.
"The e-commerce industry in China and around the world is entering a new era, and the global supply chain capabilities, fulfillment capabilities and consumer service capabilities will determine the future competitive landscape," Wu wrote in the post, which was shown to Reuters.
Alibaba split into six business units in 2023, in the biggest revamp of its 24-year history. Prior to this latest amalgamation of two of those groups, Group CEO Wu had also been CEO of the Taobao and Tmall Group and Alibaba's cloud division.
Alibaba's e-commerce platforms have been under pressure both at home and abroad as aggressive new players such as PDD Holdings' Chinese platform Pinduoduo and international site Temu, along with ByteDance's domestic Chinese Douyin and international TikTok, gain market share selling low-cost goods.
In April, co-founder Jack Ma expressed support for the internet giant's restructuring efforts and acknowledged past mistakes in a lengthy memo to employees.
The turnaround efforts have seen some success, with the international division growing rapidly under Jiang's leadership. In September quarter earnings last week, AIDC reported stand-out growth of 29%.
China's challenging consumer environment has put pressure on all retailers and e-commerce platforms, though Alibaba appears to have halted some erosion of its lead in market share in recent quarters.
After the government unveiled economic stimulus measures in September, this year's Singles Day sales festival, China's biggest shopping event, outperformed muted analyst expectations.
Alibaba did not disclose sales figures for the almost month-long event but said there was "robust growth" in sales and a record number of shoppers.
