Alibaba Xixi Park. (Alibaba official website/photo)
"The magnitude of this change is unprecedented in Ali's 24-year development history, and it is the most drastic change in production relations." Daniel Zhang said in an intranet video.
On March 28, 2023, Alibaba Group Chairman and CEO Daniel Zhang released an all-staff letter announcing the launch of the "1+6+N" organizational change. "6" refers to Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, Cainiao, International Digital Business, and Big Entertainment. Under Alibaba Group, these six business groups and a number of business companies will be established, and those who meet the conditions will have the possibility of independent financing and listing.
"One when the conditions are ripe, one on the market." Daniel Zhang said that he hopes that Alibaba will grow several listed companies in the future and continue to "have children" in a few years, so that Alibaba's business is truly prosperous.
Just the day before, Alibaba founder Jack Ma's return to China became a national hot spot. According to the Yungu Education public account, on March 27, he appeared at Yungu School in Zhejiang to talk with the principal about future education. How much effect Ma Yun's return has played in Alibaba's decision-making for change is unknown to the outside world.
According to Daniel Zhang's description, in the future, business groups and business companies will establish boards of directors respectively, implement the CEO responsibility system under the leadership of the board of directors of each business group and business company, and Alibaba Group will fully implement the management of holding company.
From the perspective of splitting, what is the strength of these six sectors under Ali?
According to Alibaba's (BABA.US) fiscal year third quarter annual report for fiscal 2023, Taobao Tmall commerce accounted for 69% of total revenue, Alibaba Cloud Intelligent accounted for 8%, international digital commerce accounted for 8%, Cainiao 7%, local life 5%, and Dawen Entertainment 3%.
Compared with fiscal 2019, the proportion of entertainment revenue decreased the most, from 6% to 3%; The increase was most pronounced for rookies, from 4% to 7%. The remaining four plates were almost unchanged.
(Leung Shuyi/Photo)
Taobao Tmall commerce remains the backbone of Alibaba Group, accounting for 70% of revenue in recent years. In fiscal 2022, its revenue increased by 18% to 592.705 billion yuan. Among them, the proportion of new active consumers from less developed regions continued to exceed 70%, higher than the proportion in fiscal 2021. Taote (Alibaba's Taobao Special Edition) introduced more first-time shoppers, adding more than 300 million new active consumers in the fiscal year.
International Digital Business, Alibaba Cloud Intelligence, Local Life, and Cainiao all achieved revenue growth of more than 20% in fiscal 2022.
International digital business revenue increased by 25% year-on-year to RMB61,078 million. Alibaba's "Overseas Digital Business Segment" was established in December 2021. In the upcoming international digital business group, Jiang Fan will serve as CEO.
Alibaba Cloud Intelligent revenue increased by 23% year-on-year to RMB74.568 billion. The cloud business reflects the growth of Alibaba's non-internet industries, mainly driven by the financial services, public services and telecommunications industries. Cloud computing is one of Alibaba's core strategies for the future, and since then Daniel Zhang he has also served as president of Alibaba Cloud Intelligence.
Local living income increased by 23% year-on-year to RMB43,491 million, and the proportion of revenue has remained at 5% since FY2019. Cainiao's revenue increased by 24% year-on-year to RMB46.107 billion.
In comparison, Dawei Entertainment was much inferior, with revenue increasing by 3% year-on-year to 32.272 billion yuan.
In the fourth quarter of 2022, Dawen's entertainment revenue decreased by 6% year-on-year to RMB7.6 billion, mainly due to the decline in Alibaba Pictures' revenue. In the same quarter, the segment adjusted EBITA was a loss of RMB25 million, a year-on-year decrease of RMB1.3 billion, and the decrease in loss was mainly due to Youku's ability to invest in and produce content. Youku's average daily paying user size grew by 14% year-on-year, but it relies on Taobao Tmall, with members mainly contributing from the 88VIP membership program. Compared with other sectors, the most pressure on the market after "independence" is Alida Entertainment.
In the four years from 2019 to 2022, all six sectors are growing, but at different speeds. The fastest growth rate was Cainiao, with a 210% increase, followed by Alibaba Cloud Intelligence, with a 202% increase. Taobao Tmall Business, International Digital Business and Local Life grew by 126%, 120% and 141% respectively. In contrast, Grand Entertainment grew by only 34% in four years.
(Leung Shuyi/Photo)
Daniel Zhang explained in the open letter that the original intention and fundamental purpose of this change is to "make the organization agile, make the decision-making link shorter, and make the response faster." In the future, each business group and company must actively face the rapid changes in the market and the rapid changes in technology, form their own development strategies, and "face the test of the market".
Southern Weekend contributing writer Angel Lee