Alibaba reshuffles e-commerce teams amid competition, slowing growth
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3 min read . Updated: 06 Dec 2021, 05:44 PM IST The Chinese e-commerce giant also names new CFO
Alibaba Group Holding Ltd. said it would reorganize its e-commerce teams and appointed a new chief financial officer, as the tech giant faces increasing competition in China, slowing growth and a plummeting stock price.
The company said Monday that its various Chinese e-commerce units would be combined into one from next year, and that it would form a new international digital commerce team.
Chief Financial Officer Maggie Wu will step down and Toby Xu, currently the deputy chief financial officer, will succeed her from April 1, Alibaba said. Ms. Wu will continue as a partner and an executive director on the board, the company said.
Chief Executive Daniel Zhang, in a letter to Alibaba employees, said the new structure is an effort to “empower [the company’s] organization to become more agile."
The reshuffling comes after a tumultuous year for the Hangzhou-based company, whose American depositary receipts have dropped to their lowest level in more than four years. The new structure appears to be in keeping with what Alibaba calls its three strategic pillars: domestic consumption, globalization and cloud computing.
Earlier this year, Alibaba paid a record $2.8 billion fine after an antitrust investigation found it had abused its dominant market position. The company has also poured more money into nascent businesses this year as it looks for more growth areas and to fend off rivals like shopping app Pinduoduo Inc., as well as companies like TikTok owner ByteDance Ltd. moving into e-commerce.
Monday’s announcements are in line with Alibaba’s recent broad shift in governance reported by The Wall Street Journal in November. Alibaba has been adjusting its organizational structure to give more power to the heads of each business unit and make the company more agile, the Journal reported.
Last month, the company cut its forecast for the fiscal year due to headwinds from heightened competition in China’s e-commerce sector along with slowing economic growth.
In his letter, Mr. Zhang also said that “diversified business governance" is part of Alibaba’s new organizational strategy, in an effort to increase innovation and agility.
Alibaba’s Hong Kong-listed stock fell 5.4% in Monday morning’s trading session amid a broad tech stock selloff in the market. That underperformed a 1.3% drop in the city’s flagship Hang Seng Index.
The China Digital Commerce team will be headed by Trudy Dai, one of Alibaba’s founding members and a partner who has previously worked as the company’s chief customer officer and president of industrial e-commerce. The team will include platforms such as Taobao, Tmall, grocery-shopping platform Taocaicai and discount-goods app Taobao Deals.
The new international digital commerce group will focus on Alibaba’s international expansion and include platforms AliExpress, Alibaba.com and Lazada, the company said. It will be helmed by Jiang Fan, who has been serving as president of Alibaba’s two flagship shopping platforms in China, Taobao and Tmall. Under the previous structure, domestic and international e-commerce portfolios were spread between Mr. Jiang and Ms. Dai’s purviews.
Alibaba has invested in building out businesses such as live streaming, grocery delivery and discount goods as competitors have made their own forays into Chinese e-commerce. Six-year-old Pinduoduo surpassed Alibaba in annual active users last year, and ByteDance started an e-commerce team to capitalize on the popularity of its short-video platform Douyin.
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As domestic growth slows, tech companies including Alibaba have looked to other potential avenues for revenue growth, such as international businesses and cloud computing. Chinese tech giants such as Tencent Holdings Ltd., Baidu Inc. and Meituan have also noted challenges both from new regulations this year and a weaker macroeconomic outlook.
In the quarter ended Sept. 30, international commerce retail accounted for 5% of Alibaba’s revenue, compared with China commerce retail’s 63%. The company’s cloud computing accounted for 10% of revenue in the same period.
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