FACTBOX – How Alibaba’s six new business units stack up

(Reuters) – Alibaba Group Holding said on Tuesday that Eddie Yongming Wu, president of Taobao and Tmall Group, will replace Daniel Zhang as chief executive, the biggest executive change at the company since its restructuring.

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

Below are the six sections:

TAOBAO TMALL TRADE GROUP

Taobao Tmall Commerce Group operates Alibaba’s domestic e-commerce marketplaces, which account for more than two-thirds of Alibaba’s total revenue. Taobao and Tmall are the dominant e-commerce marketplaces in China.

Despite the scale of Alibaba’s e-commerce business, growth in the business has slowed, reflecting the maturation of China’s overall e-commerce sector and the impact of Covid-related restrictions, fierce competition from rivals and slowing economic growth.

According to the company, after the restructuring, Taobao Tmall Commerce Group will remain wholly owned by Alibaba Group, even if the remaining units will be free to raise funds and list shares.

Trudy Dai, a member of Alibaba’s founding team, is CEO. Dai was appointed as head of the country’s e-commerce business in December 2021 as the company reorganized its international and local e-commerce businesses.

GLOBAL DIGITAL TRADE GROUP

Alibaba’s global digital commerce group includes 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 China, and account for just 8% of Alibaba’s total sales.

However, along with Alibaba’s other overseas e-commerce platforms, these are some of the company’s fastest-growing divisions.

The group’s CEO is Jiang Fan, who has led Alibaba’s international e-commerce business since December 2021. Jiang previously oversaw the Taobao and Tmall businesses.

In May, Alibaba said its board of directors had approved the process of launching external financing for the unit.

CLOUD INTELLIGENCE GROUP

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

The division also houses DAMO Academy, Alibaba’s chip and artificial intelligence research arm, and Dingtalk, the company’s workplace messaging app.

In December 2022, Alibaba Cloud experienced what it called its “longest large-scale outage” in over a decade after its servers in Hong Kong and Macau suffered a major outage that affected many services in the region, including those owned by the exchange OKX cryptocurrencies.

A few weeks after the crash, Alibaba CEO Zhang took over as head of its cloud unit, while also serving in that role through his group positions.

In May, Alibaba said it had approved a full spin-off of Cloud Intelligence Group through a stock dividend payment to shareholders and intended to complete a 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 and mapping app Amap.

Alibaba competes with Hong Kong-listed Meituan in the country’s cutthroat food delivery sector.

In 2021, Ele.me occupied 27% of China’s food delivery market compared to Meituan’s 67%, according to research firms CBNData and Trustdata.

Local services currently account for just 5% of Alibaba’s total revenue.

Its CEO is Yu Yongfu. In May, Alibaba announced that grocery division Freshippo would begin the IPO process.

CAINIAO INTELLIGENT LOGISTICS

Alibaba created Cainiao in 2013, making investments in a number of Chinese logistics companies.

The unit is currently a major standalone logistics provider in China, serving both Alibaba and third-party customers.

Cainiao accounts for 7% of Alibaba’s total revenue.

Wan Lin will remain Cainiao’s CEO, the company said. In May, it was reported that Cainiao would consider taking the company public in the next 12 to 18 months.

DIGITAL MEDIA AND ENTERTAINMENT GROUP

Alibaba Digital Media and Entertainment Group’s headquarters will house Youku, a YouTube-style video streaming site, and Alibaba Pictures, its film production unit.

The latter division triumphed in 2019 when “Green Book,” the road trip comedy she co-produced, won the Oscar for best picture.

Its CEO is Fan Luyuan.

(Reporting by Josh Horwitz; Editing by Brenda Goh and Neil Fullick)