Alibaba Initiates Significant Organizational Changes

Mar 28, 2023, 20:26pm2023/03/28 20:27:10 Pandaily

On March 28, Daniel Zhang, the Chairman and CEO of Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, sent a letter to all employees informing them about significant organizational changes that will be taking place.

Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Group will establish six business groups, including Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Cloud Intelligence, Taobao & Tmall Commerce, Local Services, Cainiao., International Digital Commerce, and Entertainment, and multiple subsidiary companies.

Each business group and subsidiary company within Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Group will operate under its own board of directors, led by a CEO. The Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Group itself will function as a holding company. The following are the specific plans:

Daniel Zhang will serve as CEO of the newly formed Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Cloud Intelligence;
Trudy Dai is appointed CEO of Taobao & Tmall Commerce;
Yu Yongfu is named CEO of Local Services;
Wan Lin continues to serve as CEO of Cainiao;
Jiang Fan is appointed CEO of International Digital Commerce;
Fan Luyuan is appointed CEO of Entertainment Group.

Apart from the six business groups and their subsidiaries, other eligible businesses within the organization can create additional subsidiary companies that operate independently under corporate management. This allows each business unit or group to confront market challenges directly while also providing greater potential for innovation incentives.

This organizational restructuring was initiated by Zhang and has been unanimously approved by all partners in the group and board members. This change begins at the top level to redefine governance relationships between all businesses within Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />; it is considered “the most important organizational change” in 24 years since its founding.

Currently, several businesses under Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> such as Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Cloud and Cainiao are already leaders in their respective markets, with rumors circulating about financing rounds and IPOs for Hema Fresh and T-Head. For these six major business groups/subsidiaries, being able to operate independently should help companies better assess value on market trends and “let employees truly fight for their own business.”

Zhang wrote in the letter that “the market is the best indicator of success. In the future, qualified business groups and companies under Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> will have opportunities for independent financing and listing.” He also expressed his desire for all Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> employees to adopt an entrepreneurial mindset and be open to changes, as failure to do so could result in stagnation or falling behind.