Alibaba unites domestic and global e-commerce operations in major overhaul

Eddie Wu, CEO of Alibaba Group, has announced a major restructuring in an internal email, combining the company’s domestic and international e-commerce operations into a single business group. Jiang Fan will serve as the CEO of the newly formed group.

This restructuring merges the operations of Taotian Group (which includes Taobao and Tmall), Alibaba’s international digital commerce group, and platforms like 1688 and Idle Fish (also known as Xianyu). The aim is to leverage Alibaba’s ecosystem of millions of merchants while enhancing shopping experiences for consumers worldwide.

Alibaba seeks to simplify cross-border business expansion for small and medium enterprises. Since stepping into the role of group CEO in September 2022, Wu has emphasized a “user first, AI-driven” strategy. Under his leadership, Alibaba has refined its core operations, modernized management, and focused on organizational rejuvenation. Wu also holds key positions as CEO of Taotian and Alibaba’s cloud intelligence group, where he has driven substantial reforms.

The creation of this new business group underscores the centrality of e-commerce in Alibaba’s growth strategy. Over the past year, initiatives such as free shipping pilots on apparel exports, expansion of product categories, and investments in Hong Kong, Malaysia, and Singapore have laid the foundation for deeper integration.

Collaboration between Alibaba’s domestic and international e-commerce units has already yielded tangible results. In July 2024, Taobao partnered with Alibaba’s international e-commerce team to launch a free apparel shipping initiative. This program, spanning six regions including Singapore, Malaysia, South Korea, and Taiwan, offered perks like no-cost returns, refunds, and shipping insurance on eligible purchases priced between RMB 99–199 (USD 14–28).

The initiative spurred nearly a 40% increase in overseas apparel sales, with participating merchants reporting an 80% year-on-year growth in overseas revenue. By September, free shipping was extended to all categories, and robust Singles’ Day sales highlighted its impact.

The new e-commerce group will build on this momentum, striving to align resources across regions, enhance efficiency, and unlock new growth opportunities.

Alibaba’s decision to integrate its domestic and international e-commerce divisions is unique in an industry where most competitors maintain separate operations for these units. This approach reflects Alibaba’s commitment to leveraging synergies across its ecosystem.

Alibaba’s supply chain, supported by millions of merchants on platforms like Taotian and 1688, positions the company to connect global consumers with Chinese manufacturers effectively. By consolidating resources, Alibaba aims to optimize global supply chains, enhance merchant performance, and improve platform efficiency, paving the way for growth in a competitive market.

Over the past year, Wu has spearheaded major changes to Alibaba’s e-commerce operations.

In July, Taobao introduced a merchant rating system that provided greater autonomy to highly rated merchants, reducing unnecessary platform interventions. Within two months, Taobao intercepted an average of 400,000 unjustified refund-only requests daily, significantly cutting invalid claims.

September marked the launch of “Tuihuobao,” a return assurance service that lowered merchant costs through partnerships with logistics and insurance companies. Nearly 1 million merchants adopted the service in its first month, with participants during Singles’ Day experiencing return cost reductions of up to 58%.

Wu has shifted the competitive focus in e-commerce beyond pricing to five dimensions: product variety, quality, affordability, service, and user experience. This represents a departure from the industry’s historical emphasis on price wars.

Alibaba has also expanded free shipping zones to remote regions in China, including Xinjiang, Tibet, and Inner Mongolia. At the same time, its 88VIP membership program grew by 43.7%, reaching 46 million members by September 2024. The addition of new payment options such as Alipay and WeChat Pay has further fueled growth, moving beyond mere competition for market share.

By mid-2023, nearly 30% of large Chinese enterprises and over 39% of small businesses had adopted overseas strategies, a number that continues to rise. Alibaba’s investment in manufacturing, logistics, and operational infrastructure has strengthened its platforms’ foothold in overseas markets.

Through this integration, Alibaba aims to unlock its full potential, drawing on years of expertise to better serve both consumers and businesses. This realignment is expected to create significant synergies, enabling merchants to reach larger audiences both domestically and globally.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Peng Qian for 36Kr.