Reporter Chen Ting
In December 2023, Alibaba Group CEO Wu Yongming announced that a youthful management team would take over Taotian Group. Now, another round of bold reforms has begun.
On November 21st, Alibaba (HK09988, stock price HKD 84.40, total market value HKD 1.62 trillion) Group CEO Wu Yongming released a staff email announcing the establishment of Alibaba's e-commerce business group, appointing Jiang Fan to be in charge and report to Wu Yongming. According to the Daily Economic News, the new e-commerce business group will comprehensively integrate Taobao Group, International Digital Business Group, as well as e-commerce businesses such as 1688 and Xianyu, forming a business cluster covering the entire domestic and international industry chain.
Photo by journalist Zhang Han
In September last year, Wu Yongming became the CEO of Alibaba Group. Since then, he has clearly defined the strategic focus of "user first, AI driven", made strategic choices, and focused on core business. He also serves as the CEO of Taotian Group and Cloud Intelligence Group, promoting the rejuvenation of the management team and making drastic reforms to the organizational structure and business strategy.
More than a year has passed, and not long ago, Alibaba (also known as Alibaba Group) announced that during this year's "Double 11" period, the total merchandise transaction volume (GMV) of Taobao and Tmall achieved strong growth. After experiencing deep reflection and achieving phased results, Alibaba must have also placed new expectations and thoughts on the new round of organizational restructuring.
Wu Yongming reiterated in this internal letter that e-commerce and AI technology are the most critical development directions for the group. With this round of adjustment, Alibaba's development strategy focusing on core businesses has become clearer.
It is worth mentioning that on the same day, Wu Yongming said at the 2024 World Internet Conference Wuzhen Summit that the greatest value of AI is not just to make one or two super apps on mobile phones, but to promote productivity change in all walks of life.
For Jiang Fan, who has been in the overseas market for 3 years, with greater power, the burden on him is undoubtedly heavier. Alibaba has once again given him the role of a 'key gentleman', can he lead Alibaba's e-commerce business to create the next glory?
What changes did Jiang Fan make after three years of going out to sea?
Over the past three years, Jiang Fan's focus has been on Alibaba's overseas e-commerce business.
On December 6, 2021, Zhang Yong, then Chairman and CEO of Alibaba Group, issued an internal letter announcing the company's upgrade of its "diversified governance" system, appointing Dai Shan and Jiang Fan to be responsible for the newly established "China Digital Commerce" and "Overseas Digital Commerce" sections, respectively.
At that time, this round of adjustment directly broke the To C and To B business lines that were previously divided based on business customer groups, and Alibaba's two major e-commerce sectors - the "Taobao series" and the "B series" - were connected for the first time. After this round of adjustment, Jiang Fan's previous management of the "Taobao series" was handed over to Dai Shan, who was in charge of the "Overseas Digital Business" sector, overseeing two overseas businesses, AliExpress and ICBU, as well as several subsidiaries targeting overseas markets such as Lazada (Lazada, one of the largest online shopping websites in Southeast Asia).
On March 28, 2023, Zhang Yong, then Chairman and CEO of Alibaba Group, issued a letter to all employees titled "Only through self transformation can we create the future", initiating a new round of corporate governance reform. According to the full trust at the time, Jiang Fan was appointed as the CEO of the International Digital Business Group.
Although there have been multiple rounds of organizational restructuring, Jiang Fan's energy has always been focused on overseas e-commerce business over the past three years. However, according to the financial report data, although Alibaba has achieved significant revenue growth, its overseas business is still in the investment period.
According to Alibaba's recent disclosure of its second quarter performance for the fiscal year 2025, the revenue of Alibaba International Digital Business Group (AIDC) increased by 29% year-on-year to 31.672 billion yuan (approximately 4.513 billion US dollars) in the three months ending September 30, 2024.
According to financial report data, Alibaba International Digital Business Group incurred a loss of 2.905 billion yuan on adjusted EBITA (non GAAP net profit, excluding specific items as stated in the company's announcement) for the three months ending September 30, 2024, compared to a loss of 384 million yuan in the same period of 2023. This was mainly due to increased investment in AliExpress and Trendyol's cross-border business.
Announcement screenshot
Taking AliExpress as an example, since the beginning of this year, the platform has significantly increased its investment in marketing to expand its influence and other demands. In March of this year, AliExpress officially became the official partner of the 2024 European Championship (UEFA European Football Championship), and the platform is also the first e-commerce sponsor of this year's European Championship. In May, AliExpress also signed football superstar David Beckham as its global spokesperson.
Although the investment momentum is not small, Alibaba also needs to deal with many strong competitors in overseas markets.
Firstly, AliExpress needs to seek growth under Temu's rapid offensive. According to data released by SimilarWeb on September 1st, Temu had nearly 700 million total visits in August this year, surpassing eBay to become the second most visited e-commerce website in the world, with Amazon still ranking first.
In the Southeast Asian market, Lazada announced in August this year that it had started making profits. At that time, the reporter learned from market insiders that Lazada Thailand was the first to achieve profitability as early as 2022. According to reports, Lazada CEO Dong Zheng stated in an internal speech that this profit proves the effectiveness of Lazada's business strategy, and Lazada will continue to increase its investment in the Southeast Asian market under a sustainable operating model. But in the eyes of the outside world, Lazada has not yet established an absolute advantage in Southeast Asia.
According to a report released by Singapore's Moteng Venture Capital, in 2023, the e-commerce platform market in Thailand will be dominated by Shopee (49% market share), followed closely by Lazada (30%) and TikTok Shop (21%).
What is Alibaba betting on when integrating domestic and foreign e-commerce?
In the past three years, while expanding overseas, Alibaba's domestic e-commerce business, mainly led by Taotian Group, has also undergone significant changes.
During last year's Singles' Day, under the leadership of then CEO of Taobao Group, Dai Shan, Tmall's core focus was on "the lowest price across the entire network". In December of last year, the newly appointed Wu Yongming announced the latest organizational decision of Taotian Group. Six young managers were appointed to lead various key businesses of Taotian Group and report directly to Wu Yongming. Wu Yongming also requested Taotian Group to face the current situation and start a new business.
After this organizational structure change, Wu Jia, who came from a technical background, took on an important position, and the young generation stepped onto the stage of "Taotian". Since the beginning of this year, under the leadership of the new leadership team, Taotian Group has been increasing its investment in user experience and merchant side.
Since September 1st this year, Taobao Group has started charging basic software service fees based on confirmed GMV for transactions on the platform. In July, Taobao announced the optimization of its "refund only" strategy. In addition, this quarter, Taobao Group has cancelled and refunded merchant annual fees and improved merchant operational efficiency through "full site promotion".
It is worth mentioning that during this year's "Double 11" shopping festival, "Taobao" no longer blindly "offers low prices", and the attention paid to middle and high end consumers such as "88 VIP" members has also increased, competing with Pinduoduo's low price route.
However, although Taobao has made some progress in GMV growth this year, the growth of CMR (customer management revenue) is still limited. According to Alibaba's Q2 2025 financial report, the customer management revenue of China's retail business sector increased by 2% year-on-year, mainly due to the growth of online GMV.
Against this backdrop, this adjustment has emerged.
With the rapid progress of the times, 25-year-old Alibaba still needs to adopt an entrepreneurial mindset, constantly innovate, fulfill its mission of serving small and medium-sized enterprises, and continue to create value for society. According to reports, Wu Yongming stated in an internal letter released this time that China and the global e-commerce industry are entering a new era, and the global supply chain capability, fulfillment capability, and consumer service capability will determine the future competitive landscape.
Zhuang Shuai, founder of Bailian Consulting, told the Daily Economic News reporter that in his opinion, this integration can quickly connect domestic and international e-commerce, greatly improve decision-making and execution efficiency, and enhance collaborative development and innovation capabilities.
From Alibaba's recent actions in e-commerce business, it can be seen that it has made some progress in integrating domestic and foreign e-commerce.
In mid July, Taobao launched the "Global Free Shipping Plan for Big Clothing". In September, Taobao's overseas strategy was fully upgraded to the "Taobao Tmall Overseas Growth Plan", which was previously only open to clothing merchants, but now expands to include opportunities for all industry merchants. In addition, in September, Taobao also launched English versions in Malaysia and Singapore.
However, this business is still in its early trial stage, and its advantage may lie in the ability to enhance its competitiveness in going global by integrating the supply chain and aggregating scattered resources. According to the reporter's understanding in September this year, Taobao Apparel's project to go global is to connect Taobao with Alibaba International's retail e-commerce platform "Huopan". In addition to selling products to overseas Taobao users through the overseas version of Taobao, they are also sold to multiple global markets through AliExpress and Lazada.
Alibaba also stated that there are over ten million small and medium-sized enterprises behind Taobao and 1688, and the rich and high-quality supply they represent is highly competitive in the global market. The integration of domestic and international e-commerce means that Alibaba's e-commerce business will move towards a broader incremental market.
Photo by journalist Zhang Han
Alibaba has a new story
Anyway, by integrating domestic and overseas e-commerce, Alibaba has a new story to tell in its e-commerce business.
Previously, Professor Cui Lili from the Department of Digital Economy at Shanghai University of Finance and Economics told reporters that for some e-commerce platforms, seeking growth overseas is a means to compensate for the gradual decline in domestic e-commerce market share. She analyzed that the logistics infrastructure can now reach a level of fulfillment, and considering the overall market situation, e-commerce platforms are all seizing the opportunity of this incremental market.
At the same time, from this adjustment, it can also be seen that Alibaba is vigorously promoting not only the integration of internal and external e-commerce businesses, but also AI related businesses.
Wu Yongming stated that e-commerce and AI technology are the most critical development directions for the group. In this internal letter, he stated, "In terms of AI, we will continue to increase investment, promote a productivity revolution driven by AI, improve AI infrastructure and supporting systems, adhere to open source and openness, continuously invest in AI product research and development in To B and To C fields, and seize the opportunities of the AI era
Since the beginning of this year, Wu Yongming has put forward many ideas about the future around AI.
On November 21, at the 2024 World Internet Conference Wuzhen Summit, Wu Yongming said that in the past year, AI's To B and To C tracks have made some progress, which is reflected in the optimization of user experience on the consumer side and the great improvement of productivity on the industrial side. He also stated that in the long run, the greatest value of AI is not just creating one or two super apps on mobile phones, but driving productivity changes in various industries.
In the process of exploring with industry partners, Alibaba has noticed that the universality of AI, combined with industry domain knowledge and enterprise proprietary knowledge, is gradually forming a super intelligent agent exclusive to each enterprise, liberating the productivity of enterprises from point to line and from line to surface Wu Yongming believes that if AI is defined as a technological revolution and productivity change, it must be matched with standards, given enough patience and more sustained investment.
Currently, AI is still in the stage of gradually landing in reality.
In Alibaba's latest financial report, it was mentioned that focusing on the integrated development of "cloud+AI", Alibaba Cloud's commercial revenue growth has accelerated, with quarterly revenue increasing by 7% year-on-year. It is worth noting that driven by double-digit growth in public cloud, AI related product revenue has achieved double-digit year-on-year growth for five consecutive quarters, with adjusted EBITA increasing by 89% year-on-year.
This year's "Double 11" reflects that the e-commerce world is gradually shifting from "internal competition" to "competition and cooperation", and the development of the local e-commerce industry to a certain height has become a concern for many insiders and outsiders. By boldly establishing an e-commerce business group, Alibaba has told a new story. Currently, the prospects of this new story may not only affect Alibaba's future, but also deeply impact the future development of the e-commerce industry.
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