Alibaba restructures to split global, local e-commerce businesses

December 07, 2021

Alibaba Group has unveiled a major restructuring plan that will see the Chinese internet giant split its global and domestic e-commerce businesses into two separate units. Citing the need for agility, it also announces several leadership appointments, including a new CFO who will assume his new role in April next year.

Alibaba said it would focus its investment on the “two strategic pillars” to better drive synergies across its consumer and wholesale commerce platforms in China as well as internationally.

Its chairman and CEO Daniel Zhang said in a letter to employees the company’s International Digital Commerce unit would pull together its overseas e-commerce and wholesale businesses, including Lazada, Alibaba.com, and AliExpress.

Southeast Asian consumers intensify online habits, spending 60% more

Region will be home to 350 million online shoppers by end-2021, up from 310 million last year, and will see online spending climb 60% per person, pushing e-commerce sales to grow two-fold to $254 billion by 2026.

Alibaba’s recent quarterly earnings put its international annual active consumers at 285 million, while its domestic annual active consumer base clocked at 953 million. Its total global figure tipped at 1.24 billion, which was a net growth of 62 million over the previous quarter and 20% year-on-year.

The Chinese company is targeting to hit 1 billion annual active consumers in China by mid-2022, and 2 billion globally in the “longer term”.

Zhang said: “We will continue to focus on becoming a truly globalised company and we believe that overseas markets present many exciting potential and opportunities for us to capture. We have confidence in our local teams, and we are charting a path forward with a holistic strategic blueprint and organisational stability for winning our overseas markets.”

The company’s latest quarterly earnings saw its overseas revenue grow 33%, with its Southeast Asian e-commerce platform Lazada clocking 82% order growth year-on-year and triple-digital growth in Malaysia, Thailand, and Vietnam.

Alibaba’s domestic commerce businesses would be parked under its new China Digital Commerce unit, which it said would better drive collaboration.

The domestic business unit would be helmed by one of the company’s founding members and partner, Trudy Dai, who had previously served as chief customer office and led various business units, including Taobao Deals and Alibaba’s community marketplace, Taocaicai.

Alibaba’s new international business unit would be headed by Jiang Fan, who had been with the company since 2013 and previously was president of its domestic consumer marketplaces, Taobao and Tmall. Prior to joining Alibaba, Jiang founded mobile analytics company Umeng.

Zhang said in his note that a “diversified business governance” would drive Alibaba’s new strategy moving forward, as the company looked to drive “more innovation and creativity”.

In addition, the restructure would “empower” Alibaba to become more agile, he said.

Alibaba also announced that Toby Xu would take over as CFO from April 1, 2022, succeeding Maggie Wu who joined the company as CFO of Alibaba.com in July 2007, before taking on the group CFO role in May 2013. She also is head of strategic investments.

Wu had led the company in three public listings, which included the Hong Kong Stock Exchange in 2019 and New York Stock Exchange in 2014. She will remain a partner and serve as an executive director when Xu takes over the CFO role in April 2022.

Currently deputy CFO, Xu began his tenure at Alibaba in July 2018 and was appointed to his deputy role a year later. He was a partner at PricewaterhouseCoopers for 11 years and currently serves as a director on Alibaba’s Sun Art Retail Group as well as Lianhua Supermarket and furniture retail chain Red Star Macalline Group, both of which Alibaba has invested in.