Reporter: Li Huilin and He Jipai
39 year old Jiang Fan returns to the power center of Alibaba and takes over the top position in e-commerce.
On November 21st, Alibaba announced the establishment of an e-commerce business group to fully integrate its e-commerce business, and appointed Jiang Fan as CEO.
The announcement is short and contains a lot of information.
The new e-commerce business group includes Taobao Tmall Group, International Digital Business Group, 1688, Xianyu and other businesses, with an annual revenue of over 500 billion yuan, which can be said to be the lifeblood of Alibaba's empire.
Gather e-commerce assets and all personnel, under the command of Jiang Fan, and report to Alibaba Group CEO Wu Yongming.
If the business is not done well and does not meet expectations, we can only replace people, "said Li Chengdong, an e-commerce analyst and founder of Dolphin Think Tank, analyzing to 21CRBR. Alibaba's domestic e-commerce business is under great pressure, which may be the reason for the transfer of Jiang Fan.
Li Chengdong believes that under the leadership of Jiang Fan, the performance of overseas business is commendable. Integrating the two and entrusting them to him for management can ensure the coherence of business strategies.
However, the e-commerce landscape has already taken shape, and if Jiang Fan wants to help Alibaba turn the tide, he will inevitably face difficulties.
Capable of winning battles
Jiang Fan's return had already shown signs.
Last year, he became a partner of Alibaba again and appeared on the Alibaba earnings conference call as the CEO of the International Digital Business Group. This is seen as a signal that he is about to return to the center of power.
The lack of an experienced person to lead the domestic e-commerce business may have made Alibaba determined.
Independent TMT analyst Fu Liang analyzed that the newly appointed Taotian management team lacks e-commerce experience and has a long adjustment period. Based on their performance in the past few months, the results are not ideal.
According to reports, the decision to choose Jiang Fan was made voluntarily by Wu Yongming and the founder of Alibaba. In Li Chengdong's view, this also indicates that Alibaba has "no one available".
Jiang's past glorious achievements have made his return a natural outcome.
Jiang Fan has managed both domestic and international e-commerce businesses and achieved good results. At the same time, he has outstanding innovation and breakthrough capabilities, and is very knowledgeable in technology, business, and supply chain
Chen Tao, a research partner at Analysys, analyzed that within Alibaba, only Jiang Fan may possess these conditions simultaneously.
He is a practical talent.
When managing domestic e-commerce, lead Taobao from the PC era to the wireless era. After switching overseas, he led a team to cultivate a peripheral business into Alibaba's second largest business.
Before Jiang Fan took over, his overseas business performance was not outstanding.
He streamlined the business, adjusted Lazada's management structure, implemented tailored strategies, shifted AliExpress to a "platform+full custody" model, and lowered the threshold for cross-border trade.
In the fiscal year 2021, Alibaba's international business revenue was only 48.85 billion yuan, accounting for 7% of Alibaba's total revenue.
From July to September this year, Alibaba's international business revenue was 31.67 billion yuan, second only to Taobao, accounting for 13% of the total, making it the fastest-growing business in the Alibaba series. However, the business is still in a loss making state, with a quarterly loss of 2.9 billion yuan.
The trend now is to have the first person in charge of everything, such as Tesla's Elon Musk and Nvidia's Huang Renxun
Human resources expert and founder of Kefan Consulting, Fan Ke, told reporters that if this executive understands the details of the business and has rich experience, they can use their influence to quickly promote change and execute efficiently.
Difficulty in both offense and defense
After taking office, Jiang Fan's key task was to help Alibaba e-commerce defend its position.
In recent years, under the siege of Pinduoduo and Tiktok e-commerce, Alibaba e-commerce has been under great pressure.
According to a Goldman Sachs report, from 2019 to 2023, Taobao's market share has decreased from 66% to 45%. Last November, Pinduoduo's market value briefly surpassed Alibaba's.
In terms of core business indicators, in the third quarter, Taotian's revenue was about 99 billion yuan, an increase of only 1%, ranking second to last in terms of growth rate among Alibaba's various business lines.
Profit (excluding interest and income tax) decreased by about 5% year-on-year, with the decline widening.
Before entering the low-speed growth period, Taotian No.1 experienced two changes in its position.
In 2021, Jiang Fan, who had been in charge of Taobao for 7 years, was involved in the peach blossom scandal and was transferred to the overseas e-commerce sector, with Dai Shan overseeing Taobao.
Last year, Wu Yongming took over as CEO of Taotian Group, replacing Dai.
Following Ma Yun's idea of "returning to Taobao, returning to users, and returning to the Internet", Wu pointed out that Taotian should make strategic choices, return to the capacity building of e-commerce essence, and improve the comprehensive experience of products, supplies, and services.
At the end of last year, Wu Yongming appointed six young managers to lead various key businesses of Taotian Group. The youngest of them was born in 1987. However, the reputation of these newcomers is not as good as Jiang Fan's.
By doing a series of addition and subtraction, Wu stabilized the situation of Taotian. According to data from Analysys, during the 618 and Double 11 periods, Taobao's GMV achieved a long-awaited double-digit growth.
Among them, during the Double 11, the market share of Taotian increased to 50%, but the turnover growth rate was 10%, lower than Pinduoduo, Tiktok, and Kwai.
Strong enemies are lurking around, and it is very difficult for Wu Yongming to further break through. He personally manages the group and has a part-time job at Alibaba Cloud, which may be an important consideration for his personnel adjustment.
Li Chengdong analyzed that currently, Jiang Fan is taking over and facing two main challenges:
Firstly, the growth rate of domestic e-commerce is slowing down and gradually approaching the ceiling; Second, Pinduoduo, Tiktok and Kwai have changed the consumer habits of users, and Taotian is hard to regain the lost users in the past.
Accelerate Fusion
Next, if Jiang Fan were to operate the steering wheel, how would he change formation?
Integrating domestic and foreign e-commerce is a big move.
The e-commerce industry in China and globally has entered a new era, and the global supply chain capability, fulfillment capability, and consumer service capability will determine the future competitive landscape
Wu Yongming pointed out in an internal letter that Alibaba's e-commerce business group will serve domestic and global consumers well, and help more small and medium-sized enterprises expand their domestic and overseas markets.
Emphasis on integration has long been evident.
In the first quarter of this year, Wu Yongming and executives such as Jiang Fan had multiple communications about the future of Taobao and unanimously agreed on the idea of "business collaboration and alignment as the key direction".
Starting from July, Alibaba has been promoting the integration of e-commerce, including Taobao's expansion from clothing to the entire industry, and the Hong Kong free shipping plan.
Fu Liang analyzed that in this round of new adjustments, Alibaba hopes to do two things: first, provide global procurement services to the domestic market, and form differentiated competitive advantages with competitors; The second is 1688 and Taotian Group, which help expand international business.
Alibaba International Station Source: Official Website
In other words, accelerate integration.
Jiang Fan is in charge of both domestic and international sectors, and will definitely put more effort into integration. For example, internal personnel mobility may be improved in the future, "Chen Tao expressed a similar view.
Domestic e-commerce has limited growth rate, and after the integration of the two, it can be driven by the international market. Chen Tao believes that incorporating foreign markets, supply chains, and talents into the entire e-commerce operation system will have a better development momentum than developing alone.
Jiang Fan will also increase investment in AI.
At the third quarter earnings conference, he mentioned that a major driving force for international business growth is technological innovation, which promotes the application of AI in various businesses.
Chen Tao mentioned that in recent years, some of Alibaba's core resources have been invested in Alibaba Cloud, and when AI technology matures, it will back feed its e-commerce business.
Jiang Fan, who is skilled in warfare, once again shoulders the banner of Alibaba's e-commerce. Waiting for him is a tough battle.