Factbox: How Alibaba's six new business units stack up

Damai Entertainment Holdings

20/06/2023 06:53

June 20 (Reuters) - Alibaba Group Holding  9988.HK  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  3690.HK  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.

 (Reporting by Josh Horwitz; Editing by Brenda Goh and Neil
Fullick)
 ((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))