FACTBOX-How Alibaba's six new business units stack up By Reuters

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FACTBOX-How Alibaba's six new business units stack up

Published Jun 20, 2023 02:10AM ET Updated Jun 20, 2023 05:51AM ET

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(Reuters) - Alibaba (NYSE:BABA) Group Holding said on Tuesday that Eddie Yongming Wu, chairman of its Taobao and Tmall Group, will succeed Daniel Zhang as chief executive officer, in the company's biggest executive reshuffle since its restructuring.

The e-commerce giant announced in March it will split into six business units, each with its own CEO and board of directors, and adopt a holding company management model, in the biggest revamp of its 24-year history.

Below are the six divisions:

TAOBAO TMALL COMMERCE GROUP

The Taobao Tmall Commerce Group covers Alibaba's domestic-facing e-commerce marketplaces, which make up over two-thirds of Alibaba's total revenue. Taobao and Tmall are China's dominant e-commerce marketplaces in China.

Despite the scale of Alibaba's e-commerce operations, growth in the business has slowed, reflecting the maturation of China's overall e-commerce sector and the impact of COVID curbs, stiff competition from rivals, and slowing economic growth.

Taobao Tmall Commerce Group will remain wholly owned by Alibaba Group after the restructuring, the company said, even as the other units will be free to raise funds and list.

Trudy Dai, a member of Alibaba's founding team, is CEO. Dai was appointed to lead the domestic e-commerce businesses in December 2021 when the company reorganised its international and local e-commerce businesses.

GLOBAL DIGITAL COMMERCE GROUP

Alibaba's Global Digital Commerce Group includes its overseas e-commerce marketplaces such as Lazada, which serves Southeast Asia, and AliExpress, which has become popular in Russia, Latin America, and parts of Europe.

These platforms face fierce local competition in the markets they operate in outside of China and make up just 8% of Alibaba's total sales.

However, together with Alibaba's other overseas e-commerce platforms, they are some of the company's fastest-growing divisions.

The group's CEO is Jiang Fan who had been leading Alibaba's international e-commerce businesses since December 2021. Jiang previously oversaw the Taobao and Tmall businesses.

In May, Alibaba said its board had approved the process to start external financing for the unit.

CLOUD INTELLIGENCE GROUP

Alibaba's Cloud Intelligence Group includes Aliyun, the company's cloud computing unit. The company is the dominant player in China's domestic cloud computing sector, with a 36% market share, according to research firm Canalys.

The division is also home to DAMO Academy, Alibaba's research arm for chips and artificial intelligence, as well as Dingtalk, the company's workplace messaging app.

In December 2022, Alibaba Cloud experienced what it called its "longest major-scale failure" in more than a decade after its Hong Kong and Macau servers suffered a serious outage that affected many services in the region including ones belonging to crypto exchange OKX.

Weeks after the outage, Alibaba CEO Zhang took over as head of the cloud unit, concurrently holding the role with his group positions.

In May, Alibaba said it had approved a full spinoff of the Cloud Intelligence Group via a stock dividend distribution to shareholders and aimed to complete the public listing within the next 12 months.

LOCAL SERVICES GROUP

This division includes food and grocery delivery services such as Alibaba's Ele.me app as well as Amap, its mapping app.

Alibaba competes with Hong Kong-listed Meituan in the country's cut-throat food delivery sector.

According to research firms CBNData and Trustdata, in 2021 Ele.me occupied 27% of China's food delivery market compared to 67% from Meituan.

Local services currently make up just 5% of Alibaba's total revenue.

Its CEO is Yu Yongfu. In May, Alibaba said grocery arm Freshippo would kick off the IPO process.

CAINIAO SMART LOGISTICS

Alibaba formed Cainiao in 2013 by making investments in a number of Chinese logistics companies.

The unit is now a major logistics provider in its own right in China, serving both Alibaba and third-party customers.

Cainiao makes up 7% of Alibaba's total revenue.

Wan Lin will continue as Cainiao's CEO, the company said. In May, it said that Cainiao will explore an IPO in the next 12-18 months.

DIGITAL MEDIA AND ENTERTAINMENT GROUP

Alibaba's Digital Media and Entertainment Group will house Youku, the company's YouTube-esque streaming video site, as well as Alibaba Pictures, its film production unit.

The latter division scored a victory in 2019 when "Green Book," a road trip comedy movie it co-produced, won the Academy Award for Best Picture.

Its CEO is Fan Luyuan.

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