Alibaba restructures its e-commerce ops to boost growth as the CCP goes after large conglomerates

After executing substantial reorganisation steps last month, e-commerce titans Alibaba Group Holding and JD.com are changing their retail business operations, with the newest initiatives targeted at increasing sales amid China’s sluggish economic recovery. According to the local media, Alibaba has reorganised its Taobao and Tmall companies by forming three key industry growth units based on consumption patterns and customer demand scenarios. Alibaba, the owner of this publication and situated in Hangzhou in eastern Zhejiang province, verified the adjustments. **Also read: Xi Jinping breaking up Chinese tech giants into smaller parts is making Google and Apple very happy.** Trudy Dai, president of Alibaba’s Core Domestic E-commerce segment, will report to the heads of three new departments: Greater Taobao (Taobao, Tmall, Alimama), B2C Retail (Tmall Global, Tmall Supermarket, Tmall Luxury), Taocaicai, Taobao Deals, and 1688.com. Separately, JD.com is revamping its retail division again, flattening the management structure. According to a person familiar with the situation, the Beijing-based firm would no longer have separate teams for its own stores and third-party stores managed by foreign merchants. “I think they made the changes because both Alibaba and JD.com’s business was not doing very well last year,” said Li Chengdong, founder of Dolphin, a Beijing-based consultancy. “Although macroeconomic headwinds are a factor, competitors such as Pinduoduo and Douyin are doing well.” The changes are also due to increased competitiveness." Li noted that the modifications were mostly intended to increase their organisations’ flexibility, allowing them to adapt more quickly. According to Tong Wenhao, an analyst at research company LeadLeo, downplaying the competitive relationship between its own stores and third-party stores will enable the two compete in a more even playing field. **Also read: Chinese tech giant Alibaba to split into six groups, separate IPOs expected** The most recent changes came after massive reorganisation efforts late last month. Alibaba announced a reorganisation of its entire company into six autonomous organisations. Each company unit will have to compete in the market on its own and will be allowed to seek funds through initial public offerings. Separately, JD.com stated that it will split out its real estate and manufacturing businesses and float them on the Hong Kong stock exchange. China’s retail industry is gradually rebounding after being severely harmed by Beijing’s tight Covid-19 regulations for the majority of the previous two years. According to official data, overall retail sales of social consumer items increased 3.5 per cent year on year to 7.71 trillion yuan (US$1.12 trillion) in January and February, reversing prior month decreases. A shoe trader called Zhou, who resides in Zhejiang province and sells wholesale items to shoe stores and live streams, claimed his company has improved dramatically this year compared to the same time last year. According to Hong Kong, an associate researcher at the Ministry of Commerce’s research section, e-commerce behemoths have lately implemented extensive management adjustments to “improve their competitiveness and market position." “Those changes are intended to better fit current business needs and strategic priorities by reducing duplication and waste and improving efficiency and innovation,” Hong explained. **Also read: AI frenzy: Chinese tech firms are scrambling to make AI generative bots like ChatGPT** Alibaba’s stock gained 18 per cent in the week ending March 27 as investors welcomed its internal reform, while JD.com’s stock increased 8.4 per cent in the same period. Both stocks have dropped in value during the last two weeks. “Traffic is flowing to platforms like Douyin so traditional e-commerce platforms are under greater strain,” said Li of the Dolphin consultancy. Nonetheless, he is cautiously hopeful that the reorganisation changes would help the two largest e-commerce players in the long run. Read all the  Latest News,  Trending News,  Cricket News,  Bollywood News, India News and  Entertainment News here. Follow us on  Facebook,  Twitter and  Instagram.