About 2 and a half years ago, Chinese e-commerce and tech giant Alibaba underwent a major restructuring, introducing the “1+6+N” model (1 overarching Alibaba group, 6 business groups and several other businesses). On 22 August, the company reportedly restructured again, going from “6+N” down to just 4 major groups.
This time, the division is more straightforward. The four main groups cover: domestic e-commerce in China, international digital business (largely e-commerce), smart cloud services with Aliyun and a catch-all for “everything else”.
Interestingly, within the domestic e-commerce group, travel platform Fliggy and the “local life” services, including food delivery platform Ele.me and Taobao’s “instant retail” service Flash Buy (淘宝闪购), are included in this category. Meanwhile, Alibaba’s supermarket and grocery arm Freshippo is part of the “everything else” group, along with DingTalk, Quark and Cainiao Smart Logistics Group.
In recent months, the tech giant has been keen to shed its “non-core” businesses, such as offline shopping centres. This helps explain why Alibaba is combining some of its businesses under one umbrella in this restructuring. At the same time, the past few months have seen a fierce price war in “local life” services between Flash Buy/Ele.me, Meituan and JD.com. Bringing these businesses together helps Alibaba’s larger e-commerce brands better leverage the ecosystem. But it also underlines that Ele.me and Fliggy will continue to operate as individual companies, even after joining the new e-commerce group.
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