A little over 2 years ago, Alibaba was split into what it called “1+6+N” (meaning that the 1 Alibaba Group was divided into 6 business groups and multiple smaller businesses) in an extraordinary restructuring. Now, it would seem the split has been partially reversed as the tech giant announced that the e-commerce-centric Taobao and Tmall Group will absorb the food delivery platform Ele.me and travel platform Fliggy, both from the Local Life Group.
Both Ele.me and Fliggy will keep their CEO and continue to run as individual companies. The difference is that both CEOs will be reporting to Jiang Fan, head of the e-commerce business group, and will be working with other companies in the e-commerce wing of Alibaba.
The e-commerce business group includes Taobao and Tmall Group, 1688 and Goofish, among others. One of the key changes in this new restructuring is that Taobao’s latest Flash Sale, its “instant retail” service, will sit between e-commerce and local life services, such as real-time delivery for groceries. With the merged platforms now sharing data and traffic, some feel that Alibaba is creating an e-commerce “super app”. Indeed, the past 618 Shopping Festival saw Ele.me and Taobao Flash Sale working closely together, while Fliggy leveraged Taobao’s livestream and sales resources.
Another speculation is that the restructuring is also a reaction to JD.com’s entrance to the food delivery market in May and its recent announcement of entering the hotel sector. The food delivery giant Meituan also participated in 618 this year with its “instant retail” service. It would seem that e-commerce and local life are gradually merging into one sector with the rise of “instant retail”. Of course, there are also pundits who note that the new structure marks a gradual reversal of the split in 2023.