Alibaba’s Daniel Zhang launches restructuring hot on the heels of US$30.8bn Singles’ Day record

  • The reorganisation highlights the increasing importance that Alibaba is placing on its cloud, cross-border e-commerce and New Retail businesses
PUBLISHED : Monday, 26 November, 2018, 2:16pm
UPDATED : Monday, 26 November, 2018, 11:10pm

Alibaba Group Holding chief executive Daniel Zhang Yong on Monday announced that the company would be restructuring its Tmall e-commerce business and upgrading its Alibaba Cloud business unit as they become more strategically important.

As part of the reorganisation, Tmall will now include the e-commerce platform, Tmall Supermarket, and Tmall’s import and export business, according to the statement posted on Alibaba’s official Weibo account. Alibaba is the parent company of the South China Morning Post.

The renamed Alibaba Cloud Intelligence business group will now be overseen by Alibaba chief technology officer Jeff Zhang Jianfeng, who will also serve as its president, replacing Simon Hu Xiaoming. A New Retail technology business group will also be set up, to be overseen by Wu Zeming.

The Alibaba Cloud Intelligence platforms are part of a strategy to establish smart technology infrastructure for the digital economy era, the company said in its statement.

The restructuring comes hot on the heels of a record-breaking US$30.8 billion Singles’ Day earlier this month and is the first significant reorganisation by Zhang since he was named chairman-designate. Alibaba co-founder and executive chairman Jack Ma will step down next September and hand over the reins to Zhang.

What did we learn from Singles’ Day?

The reorganisation highlights the increasing importance that Alibaba is placing on its cloud and cross-border e-commerce businesses, as well as New Retail, a term coined by Ma that refers to the integration of both online and offline shopping experiences.

Alibaba Cloud is currently the third-largest cloud infrastructure-as-a-service provider, behind Amazon Web Services and Microsoft, and is the largest cloud computing services company on the mainland. It competes with rivals such as Tencent Cloud in the mainland market. The company’s large trove of data from its e-commerce businesses have helped the company branch out into providing cloud-based industry solutions based on artificial intelligence and machine learning.

Hangzhou-based Alibaba is also betting big on New Retail, and has spent billions in recent years to invest in offline retail stores as it seeks to help improve operational efficiency and customer experience by integrating online and offline e-commerce.

The company has opened over 90 Hema supermarkets, its own chain of technology-enabled grocery stores that offer shoppers a supermarket and dining experience. In September, Alibaba said that a Hema Supermarket that has been open for at least 1.5 years averages daily sales that are upwards of 800,000 yuan (US$116,500) – about 60 per cent of which comes from online orders.