Alibaba splits into Chinese and overseas units
The move is thought to be linked to increasing scrutiny of big tech firms in China
China's Alibaba Group is reorganising its international and domestic e-commerce businesses in an effort to increase agility and to 'better drive synergies across its consumer and wholesale commerce platforms both in China and globally'. The major change in the reorganisation is the splitting of the company's digital commerce division into two units, which will separately be responsible for its overseas and domestic presences.
The 'International Digital Commerce' unit, to be led by current Taobao and Tmall president Jiang Fan, will deal with wholesale and retail customers outside China. It will include logistics service AliExpress, marketplace Alibaba.com and Southeast-Asia centric ecommerce platform Lazada.
A domestic unit, named 'China Digital Commerce', will combine Alibaba's Chinese consumer-facing and wholesale marketplaces. It will handle everything in China and will include Alibaba's two main marketplaces, Tmall and Taobao. Alibaba veteran Trudy Dai, who has previously overseen a number of Alibaba platforms, will lead the domestic business unit.
"As we continue to build a multi-engine approach to drive future growth, a 'diversified business governance' will become Alibaba's new organisational strategy as we look towards the future," Alibaba Group CEO and chairman Daniel Zhang wrote in a letter to Alibaba staff.
"We want to explore new business governance approaches to drive more innovation and creativity across our teams and businesses.
"We will continue to focus on becoming a truly globalised company, and we believe that overseas markets present many exciting potential opportunities for us to capture."
Changing times
Alibaba is one of China's largest tech firms, having grown quickly through the early years of the 21st century. Today, it owns and operates a diverse portfolio of businesses around the world.
However, the Chinese state is in the midst of a crack-down on big tech firms, and despite its success - or perhaps because of it - Alibaba is not immune. The state launched an investigation into the company over its anti-competitive behaviour in December 2020, and issued it with a $2.8 billion fine in April this year: equivalent to about 12 per cent of its total 2020 profit.
In addition to the fine, Alibaba must file self-examination and compliance reports to the State Administration for Market Regulation for three years.
In its last quarterly earnings, Alibaba announced that its annual active consumers (AAC) overseas had reached 285 million, and reiterated its goal of serving 2 billion consumers globally in the future.