Author/ Author of "Finance and Economics" Weekly He Chang Zeng Guang Xue Yongwei
Editor/ Dong Yuqing
Recently, a record of changes in industrial and commercial information related to Alibaba has added speculation to the outside world.
Daniel Zhang, Jack Ma's successor and chairman and CEO of Alibaba Group, stepped down as the legal representative and chairman of Taobao (China) Software Co., Ltd. and Zhejiang Tmall Technology Co., Ltd. and was succeeded by Dai Shan, who is in charge of Alibaba China's digital business sector, which are the operating entities of Taobao and Tmall. One in and one out, it is inevitable to arouse people's reverie.
Alibaba's response was that the series of changes were based on legal arrangements that aligned with rights and responsibilities.
In the last month of 2021, Alibaba ushered in the biggest organizational adjustment since its listing, Daniel Zhang announced the further upgrading of the diversified governance system, adding four presidents in charge, responsible for several core sectors, including Dai Shan, who is one of the "Eighteen Arhats".
In the face of the uncertainty of the external environment and the pressure caused by industry competition, organizational streamlining and integration seem to be the common choice of many Internet companies. There is a voice that believes that the biggest change that Daniel Zhang has brought to Ali is to let it explore new business tentacles such as Alibaba Cloud and Ant Technology in addition to the e-commerce business, which is also the beginning of Ali's expansion ideas. The further retreat of the Daniel Zhang also means that this stage is over.
Now, although Ali's main business is still in the forefront, how to continue to maintain growth is its biggest hidden worry. Other businesses, including local life, cloud and technology, are also facing adjustments and changes, and a series of impacts of the change are still continuing.
Ali's desire for change has never been more urgent, and this time, adjustment is Ali's active choice.
The residual temperature of the change array
The two companies in which Dai Shan took over as legal representative and chairman are 100% owned by Taobao China Holdings Co., Ltd., of which Taobao (China) Software Co., Ltd. was established in 2004 and Zhejiang Tmall Technology Co., Ltd. was established in 2010. Prior to this, the successive legal representatives and chairmen of the two companies were Ma Yun, Lu Zhaoxi and Daniel Zhang, without exception, all of whom were concurrently appointed by the then CEO of Alibaba Group.
In other words, Dai Shan took over the position after taking over the specific business, just as Jiang Fan was transferred to the overseas business and no longer served as the legal representative and chairman of Zhejiang Taobao Network Co., Ltd. and Zhejiang Tmall Network Co., Ltd., and his position change is closely related to business change.
It all started with the internal letter released by Daniel Zhang on December 6, 2021.
As he put it, "in order to further upgrade the diversified governance system and use a clearer strategic blueprint and a more agile organization to face the future in various business areas", Alibaba's e-commerce business has been divided into two, and the business of Big Taobao (Taobao, Tmall, Alimama), B2C Retail Business Group, Taocaicai, Taote and 1688 constitutes China's digital business sector, which is managed by Dai Shan, the president of the group; AliExpress and International Trade (ICBU), as well as a number of subsidiaries facing overseas markets such as Lazada. Together, the overseas digital business sector was formed, which was managed by Jiang Fan, who is also the president of the group. Since then, Dai Shan's left hand B series and right hand Tao series have become the most powerful woman in Alibaba, while Jiang Fan, who used to dominate the full mobility of Tao's e-commerce, turned to overseas markets to meet greater challenges.
Dai Shan was Ma Yun's last student, and began to follow the latter to fight the world during the Lakeside Garden period, and successively took charge of sales, marketing and human resources. She is low-key and gentle, Ma Yun "means where to fight", she once said: "The company let me do sales I will do sales, let me do customer service I will do customer service, I will not think too much, I am willing to do it happily." But it is this veteran employee who claims to be less intense in his pursuit of careers, but now he has become the only person in Alibaba's "Eighteen Arhats" who is active in the front line of business.
Some Ali employees told the "Finance and Economics" weekly that the changes in the top level are transmitted down layer by layer, and if it does not involve direct leaders, the direct impact on ordinary employees is not very large. However, many employees said that Dai Shan "cares more about the details", under the role of this management style, the once relatively extensive budget declaration began to become stricter, "may have applied for a budget in the past, the difference of more than 100,000 yuan is actually nothing, and now it will be cut more carefully."
Photo/Visual China
This may be more concrete in breaking down business barriers. On the sixth day of taking office, Dai Shan announced a new organizational structure for Taobao's Tmall business, focusing on breaking boundaries and fully integrating. The user side set up a user operation and development center, the business side set up an industrial operation and development center, and a platform strategy center was set up for the development of business operation and marketing tools, which was respectively responsible for Yu Feng (Xuan De), Yang Guang (Blowing Snow), and Wang Mingqiang (Si Han) to report to Dai Shan; Taobao live broadcast and shopping two business status improvement, the person in charge of the change to report directly to Dai Shan. In addition, Lu Su, CTO of Alibaba Group, is also the CTO of Da Taobao, and Shi Tai of the Group CCO/CRO is also the CCO/CRO of Da Taobao; Alimama continues to be responsible for Liu Bo (Jia Luo) and reports to Dai Shan.
More than one employee reported that the vibration caused by the personnel adjustment was violent. One example is that Dai Shan pays a lot of attention to employee attendance. A person familiar with the matter mentioned: "Some people say that she will go to the workstation around 10 o'clock in the morning, if there are too many vacant seats, she will ask why there are so many empty here, which department?" ”
Her fire is not to be described as unrelenting, and more than 20 years of deep qualifications, a strong sense of belonging and honor to the company, as well as a careful, patient and decisive personality, is probably the reason why Daniel Zhang has high hopes for Dai Shan - "I look forward to Dai Shan's deep market experience, outstanding leadership and unique female experience perspective, and continue to play Alibaba's leading role in China's consumer field." From this point of view, Dai Shan is indeed the most suitable person to take on the heavy responsibility.
So far, Alibaba's business has been divided into four business segments, in addition to the parts in charge of Dai Shan and Jiang Fan, AutoNavi, local life and Fliggy form a life service sector, which is managed by Yu Yongfu, and the cloud and technology sector is responsible for Zhang Jianfeng. The plate governance model on the basis of the operation responsibility system of each business unit is formed, and the rights and responsibilities of each line are gradually clarified.
Pluralistic governance has divided Ali, and each section has become self-sufficient, which will inevitably bring about the result of "becoming smaller".
Actively select "Smaller"
Some obvious cases show that Ali began to keep letting go.
Since last year, the pressure on profitability has made Ali begin to actively abandon some inefficient businesses. In the past March, the star product Ten Hui Group, which was once led by Ali, was shut down with the news of a complete shutdown. In April, Caijing Tianxia Weekly saw that the Shihuituan Mini Program was still in a state of no maintenance and could not be accessed by users; the Shihuituan App could still be downloaded normally, but the main page was also blank.
This veteran community group buying player, which emerged in Hunan in 2018, has developed rapidly in 2020 after the outbreak of the epidemic. In November 2020, after Didi, Meituan, and Pinduoduo launched the community group buying application, Alibaba began to invest in Shihui Group for the first time to open an incision in the community group buying business.
Photo/Visual China
Recall that at the beginning of 2021, Alibaba also threw 750 million US dollars to the Shihui group, launched the source factory of alibaba's 1688 wholesale website, and sold the goods directly on the shihui group; Ali's supermarket RT-Mart also supplied some daily chemical supplies to the shihui group; the entrance to Taobao home Taobao to buy vegetables was also the first choice for the ten huituan. At that time, with the support of Ali, Shihui Group also ranked among the forefront in the community group buying industry where the price war and subsidy war were fierce.
But change happens quickly. In December 2021, the Shihui group reported a "violent layoff" incident. A month later, due to the delay in delivering the goods after the consumer placed an order to pay, the Group received another 300,000 yuan fine.
This is the most typical portrayal of Ali's eclipsed departure after a wild run. The products that came to the news at the end of March like the Ten Hui Group are another local life service product under Ali- Fliggy.
Fliggy President Zhuang Zhuoran admitted in the internal letter that Fliggy will build its own working group, management system, the market and demand of the tourism industry are completely different from e-commerce, Fliggy should respect the market, "for the future independent face of the market to be fully prepared." Fliggy still enjoys Ali's financial and resource support, but will move towards a more "independent" development.
In March, Fliggy insiders also confirmed to the media that "Fliggy's reform and adjustment will give the company more autonomy, but Fliggy is still a wholly-owned subsidiary of Alibaba and is not independent from within the group." Ali chose to let go and let Fliggy "fly" independently, which is a "flexible decision" to adapt to the great changes in the post-epidemic era.
Another big change happened to another of Ali's star businesses, Ant Group.
Over the past decade, Ant Group has expanded wildly.
Especially in 2013, the balance treasure launched in 2013, the scale of funds exceeded 10 billion yuan in the first month of the launch, and at its peak, the scale of funds under management reached 1.83 trillion yuan, which can already be compared with several major head banks. After that, Ant Group has successively launched a series of products such as Huabei, Borrowing, Sesame Credit, and Mutual Treasure. In addition to financial business, IT Orange data shows that as of August 2020, Ant Group has made a total of 171 foreign investments, covering travel, real estate, catering, media, artificial intelligence and other fields. According to incomplete media statistics, the total amount of Ant's foreign investment is as high as nearly 300 billion yuan.
On July 20, 2020, Ant Group, the parent company of Alipay, announced that it has launched the "A+H" listing plan. The IPO it seeks is valued at at least $200 billion. But more than three months later, on the evening of November 3, Ant Group was suspended from listing.
After the suspension of listing, the ants began to "become smaller". In the fourth quarter of 2021, the most out-of-the-loop star product Tianhong Fund Balance Treasure, the scale dropped to 749.117 billion yuan; in December 2021, the first platform mutual treasure with more than 100 million members in the mutual aid industry announced its closure; in January 2022, Alipay united 6 institutions and launched only a few days of investment advisory new product "Golden Selection Investment Advisor", which was also stopped.
But the pace of ant has not stopped, in April, ant group announced and global payment platform 2C2P reached a strategic partnership, restart overseas strategy. Aiming at a new market for electronic settlement in Southeast Asia.
In the past, Ali's investment logic was like a game of Go, and Cai Chongxin, who was Ali's CFO, also admitted that for chess players, strategic layout is particularly important. Ali is more concerned about whether the acquired or controlled companies gain an advantage in their own territory than whether they can join forces to eat more sunspots and help the company achieve an overall victory.
Ali, which lacks traffic, has vigorously laid out the content track in the past, but now these businesses have contracted and retreated to varying degrees.
In February 2021, symbolizing the utopia of niche music, The Shrimp Music acquired by Ali was shut down, and a group of music fans began to write articles recalling the story of Shrimp Rice for 12 years; in July, Real Such as Me, a social product owned by Ali, which only appeared for more than a year, announced that it would stop operating.
In September 2021, Alibaba Venture Capital liquidated mango super media shares, held it for less than 1 year, and did not reach the exit commitment period, resulting in a floating loss of about 2.3 billion yuan on the book.
According to Phoenix Technology, as of September 2021, Alibaba has invested in more than 40 media companies, but most of them are losing money. Taking the film and television sector as an example, Ali had invested 4.68 billion yuan in Wanda Film, and the stock price at that time was 51.96 yuan, which was 71.23% lower than the current loss of 14.95 yuan of Wanda Film's stock price.
One voice believes that the biggest change brought to Ali by Daniel Zhang after taking office is to explore other businesses besides e-commerce, such as local life and financial business. But with the fading of Daniel Zhang, Ali's diversification and expansion seems to have come to an end.
The joys and sorrows of the main business of e-commerce
For Alibaba, which is becoming more and more massive, the significance of Taobao's "long-term integration" is that a mature business takes the first step to make a bloated business, and behind the unified platform mechanism, the entire organization is moving in a leaner, more efficient and more agile direction. This is particularly important at a time when the external environment is full of changes, the industry's growth space is approaching the ceiling, and competitors are aggressive.
According to alibaba's latest financial report, in the third quarter of fiscal 2022, the revenue of the China Commercial Segment was 172.226 billion yuan, an increase of 7% year-on-year, and the revenue of the International Business Segment was 16.449 billion yuan, an increase of 18% year-on-year, and the two accounted for 78% of the total revenue.
Specific to the China Commercial Segment, for the 12 months ended December 31, 2021, its annual active consumers were 882 million, with a net growth of more than 20 million in a single quarter – mainly driven by Taobao Special Edition, its annual active consumers reached 280 million, an increase of 39 million over the previous quarter; on the other hand, Taobao Tmall's annual active consumers in the 2020 calendar year had a retention rate of 86% in the natural year of 2021.
If the consumer experience determines the user's willingness to retain, fresh, food and other high-frequency consumption categories to a certain extent to enhance the user's use of stickiness, this fiscal quarter Tao cai cai GMV increased by 30% month-on-month, together with the payment order volume increased by more than 100% year-on-year Taobao special edition, so that Alibaba tasted the sweetness in the sinking market.
However, it should be noted that during the period, China's retail commercial customer management revenue represented by Taobao and Tmall showed negative growth for the first time in recent years, down 1% year-on-year, and the physical GMV growth of Taobao Tmall was still in single digits. On a post-earnings conference call, Xu Hong, CFO of Alibaba who took over Wuwei, explained that Alibaba's business was affected by both the macro economy and the competitive environment, so it recorded single-digit growth in the fiscal quarter.
The so-called competitive environment has both the wrestling of old rivals such as JD.com and Pinduoduo, and the collision of new sharp edges such as Douyin and Kuaishou. In the past year, Douyin e-commerce has gradually cultivated awareness at both ends of the business and the user. Some brand owners revealed to the "Finance and Economics" Weekly that most brands previously regarded Douyin as an effective channel for clearing inventory, but with the improvement of its infrastructure and the gradual development of user habits, the brand's attitude is also changing, and it has begun to choose to promote and incubate new products in Douyin. That is to say, the brand will not completely leave the Tao system, and it will not give up the traffic position of vibrato.
Photo/Visual China
This is not good news for Alibaba, in the context of the overall weak consumer environment, the fight in the e-commerce stock market is unprecedentedly fierce. Similar to the content track dividing up users' time 24 hours a day, major e-commerce companies are only targeting the money that users can spend and are willing to spend.
Opponents are onslaught. According to the "Special Analysis Report on E-commerce Data in the Cosmetics Industry" released by Guojin Securities, the GMV of cosmetics e-commerce in the first quarter of 2022 reached 116.7 billion yuan, an increase of 8% year-on-year, and in terms of subdivision channels, Taoshi accounted for 54%, an increase of 6% year-on-year, Douyin accounted for 23%, an increase of 164% year-on-year, the growth rate ranked first in the head e-commerce platform, and clothing and beauty was originally the core business of Alibaba e-commerce.
Therefore, consolidating the main business and stabilizing the e-commerce market is undoubtedly the strategic focus of Alibaba, as well as the purpose of organizational structure adjustment.
On the one hand, it is an upgrade to an existing product. Tmall App has launched the "Cat Enjoy Self-Operated", starting from 3C, daily necessities and personal care categories. Daniel Zhang said that Alibaba has no preference for models, and it is the most important thing to be able to serve consumers well. Obviously, the self-operated layout is a further refined operation of the user group, and in addition to growth, Alibaba has set its sights on meeting the hierarchical needs of users.
On the other hand is the launch of brand new products. Based on the source of origin, "Bee Yun" provides supply chain and platform support for agricultural product merchants, and "State Stick" focuses on community e-commerce and recommends trendy and good things for young people. Under the multiple attempts, it is actually Alibaba's active response to complex challenges, but the effect remains to be seen.
Aliyun, wolves around
Over the past few years, cloud services have been seen as Alibaba's second-largest growth pole. In 2021, Alibaba Cloud's revenue was 72.4 billion yuan, which is the second largest business segment in Alibaba's internal revenue, second only to the e-commerce business.
The current players of the domestic cloud computing business, in addition to Alibaba, Huawei, Tencent and other Internet manufacturers, are mainly the three major operators of telecommunications, mobile and Unicom, in addition, there are a number of state-owned enterprises are also entering the cloud business.
Although Alibaba Cloud still ranks first in China in terms of market share, Alibaba Cloud is still ranked first in China, but in terms of global market share, Alibaba Cloud has been surpassed by Google from the previous third in the world, ranking fourth with less than 6% of the share, second to Amazon (AWS), Microsoft (Azure) and Google (GCP).
Source/statista
In the middle of last year, Alibaba Cloud lost a major overseas customer, and the other party decided to terminate its relationship with Alibaba Cloud and replace the cloud service provider, which most people in the industry believe to be ByteDance's TikTok. According to Alibaba's Q1 call in fiscal 2022, the impact of the loss of major customers will continue until the end of the fiscal year, until the other party's international business is completely separated from Alibaba Cloud.
In February 2022, Alibaba released the Q3 financial report of fiscal 2022, and the revenue growth rate of Alibaba Cloud was reduced to 20% for the first time, setting the lowest growth rate since Alibaba Cloud announced its performance, which was not only lower than overseas peers, but also lower than domestic friends such as HUAWEI CLOUD and Tencent Cloud.
According to the financial report data, in the fourth quarter of 2021, the world's top three cloud service providers, Amazon AWS revenue growth rate of 40%, Microsoft cloud growth of 26%, Google cloud growth of 44%. Under the premise of superior market share, the leading cloud service giant still maintained a higher growth rate than Alibaba Cloud.
Canalys' 2021 China Cloud Service Market Report released in March this year showed that Alibaba Cloud's share of the domestic cloud infrastructure service market in 2021 was 37%, an increase of 30% year-on-year, and its market share was lower than that of the previous year. As its main competitor, HUAWEI CLOUD's market share reached 18%, an increase of 67% year-on-year; Tencent Cloud accounted for 16% of the market, an increase of 55% year-on-year; Baidu's intelligent cloud market accounted for 9%, an increase of 55%.
"Among the four clouds, Ali is definitely still in the first place, but last year its share still declined, and some orders were taken away by other families," said an industry insider.
In terms of operators, in the first half of this year, the mobile cloud revenue was 9.172 billion yuan, an increase of 353.80% year-on-year; tianyi cloud revenue in the first half of the year was 14 billion yuan, an increase of 109.3% year-on-year. As state-owned enterprises, operators often have more advantages than Internet companies in the government and enterprise markets.
At the same time, Alibaba Cloud has recently been in the midst of personnel turmoil. In early March 2022, according to Lei Feng, Alibaba Cloud introduced Cai Yinghua, former president of Huawei's enterprise business in China, as senior vice president of Alibaba Group, with the rank of M7/P12, higher than Jiang Fan (M6) after the demotion. In early April, Ren Geng, president of Alibaba Cloud China, was revealed to have left and was replaced by Huang Haiqing, vice president of Alibaba Cloud China.
In addition, although Alibaba Cloud is now Alibaba's second largest revenue pillar, its current profitability is still weak. In the third quarter of fiscal 2022, Alibaba Cloud's business was adjusted by EBITA profit of 134 million yuan, making a profit for five consecutive quarters. However, Alibaba's net profit in the quarter was about 20.429 billion yuan, and after adjusting EBITA to 44.822 billion yuan, Alibaba Cloud's profit was less than zero.
In contrast, as the world's leading cloud service vendors, Amazon and Microsoft have achieved stable profits, Amazon AWS 2021 operating profit of 18.532 billion US dollars, operating profit margin of 29.8%, Microsoft operating profit of 29.971 billion US dollars, operating profit margin of 44.2%.
Today, the issue of profitability is being put on the table by Alibaba Cloud. After the new president of Alibaba Cloud China, Huang Haiqing, took office, he put forward two key directions for Alibaba Cloud in China, one is to focus on sales on high-quality independent products, and the other is to attach importance to profits. Previously, there were also media reports that in addition to revenue growth, Alibaba Cloud will begin to assess profits this year.
For Ali, from Ma Yun, Daniel Zhang to Dai Shan, the three generations of old, middle-aged and young people have successively crossed the baton, and how to further ensure that their position as the "overlord" of China's Internet is not sidelined on the road of exploration of diversified governance has become a new proposition.
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