Alibaba Announces Major Changes in Structure

Shanghai — Alibaba plans to restructure its international and domestic e-commerce businesses and replace its CFO. The changes come as the tech titan faces fierce competition, a slowing economy, and a regulatory crackdown.

Hit by weaker economic growth and fierce competition from a plethora of rivals, Alibaba last month slashed its forecast for annual revenue growth to its slowest pace since its 2014 stock market debut. 

Chinese regulators have also cracked down on the tech and other sectors, particularly on anti-trust issues that have seen Alibaba abandon a policy requiring merchants to set up shop on its platforms exclusively. In April, the company was fined a record 18 billion yuan ($2.8 billion) for abusing its dominant market position.

It will form two new units – international digital commerce and China digital commerce, which was part of efforts to become more agile and accelerate growth.

The international digital commerce unit will include AliExpress, which sells to retail buyers, particularly in Europe and South America. However, it’s Southeast Asian e-commerce businesses Lazada and will be more focused on selling to overseas business customers.

It will be headed by Jiang Fan, who had been in charge of its leading Chinese retail marketplaces. The change is seen in line with Alibaba’s aim to make ‘globalization’ a key focus area in addition to cloud computing and domestic consumer spending.

Globalization “helps Alibaba to get new traffic volume externally (and) seek new growth potential while China has been increasing supervision,” said Hong Kong-based Guotai Junan analyst Danny Law.

China, digital commerce unit will include Alibaba’s two leading marketplaces, Tmall for established brands and Taobao, which welcomes all kinds of merchants. Trudy Dai, who has previously overseen several Alibaba platforms, will be in charge of this unit. The new structure for domestic e-commerce puts Dai responsible for all Chinese retail marketplaces, including Taocaicai – its community e-commerce service, Taobao Deals, and Lingshoutong, a retail management platform for mom and pop stores, said analyst Xiaoyan Wang.

Alibaba also announced that deputy chief financial officer Toby Xu would succeed Maggie Wu as CFO from April, describing his appointment as part of the company’s leadership succession plan. Xu joined Alibaba from PWC three years ago.