Alibaba to sharpen business focus through restructuring

PUBLISHED : Friday, 11 January, 2013, 12:00am
UPDATED : Friday, 11 January, 2013, 3:56am

Mainland e-commerce giant Alibaba is going in for a major restructuring by splitting the company into 25 units, each led by a general manager, chief executive Jack Ma Yun told the staff in an internal e-mail yesterday.

"We are organising the company into smaller business units that will be better prepared to pursue their business with focus while encouraging collaboration when required," said group spokeswoman Florence Shih.

The internet giant, which operates popular e-commerce sites Alibaba and Taobao, is trying to avoid the bureaucracy that large companies tend to develop, and to be more nimble.

"These 25 units will be free-standing business units focused on their respective business areas," Shih said.

In his message, Ma said: "This is the most difficult reorganisation in Alibaba's 13 years. It's a culture shift!" He added that he wanted the units, though they would have their own responsibilities, to focus beyond their key performance indicators and treat the firm's overall performance as the barometer of success.

Alibaba's last restructuring came in July, when it split its flagship, just-privatised business-to-business company into two entities to improve operating efficiency. With that reorganisation, Alibaba has since been running seven core business groups.

Alipay, China's leading third-party online payments company, is majority-owned by Ma and remains an affiliate of Alibaba.

In June 2011, the Hangzhou-based company divided its online retail services unit Taobao into three wholly owned subsidiaries, each focused on specific e-commerce market segments.

Shih said the principles of the latest adjustment were the same as the ones adopted when Taobao was reorganised. "It allows for greater flexibility and focus on the respective businesses, therefore enabling greater growth."

She added Alibaba had always emphasised on giving its staff opportunities. "By creating 25 general managers, it allows Alibaba's young leadership to further grow and develop."

The top-tier management team remained intact, Shih said. "This is about how we organise the level below the level that reports to the CEO."

Alibaba bought back half the 40 per cent stake Yahoo owned in the company for about US$7.6 billion in September.

The group has more than 25,000 employees worldwide. Its online retail platforms and hit 1 trillion yuan (HK$1.23 trillion) in gross merchandise volume in the first 11 months of last year.