How will Taobao Tmall Group, which is fully independently managed, adjust? And what's the point?

Tmall, Taobao e-commerce brand promotion poster Visual China data map

Following the full integration of Taobao and Tmall last year, Alibaba's e-commerce business has once again ushered in an adjustment, and Taobao Tmall Group, of which Dai Shan is CEO, took the lead in completing the organizational design among the six major groups.

On April 14, the surging news reporter learned that with the integration of the former Alibaba Group's middle office team in whole or in part of the customer service, technology, human resources, finance, etc., Taobao Tmall Group has a complete and independent structure of human and financial affairs, realizing the comprehensive independent operation and management of Taobao Tmall Business Group.

Just two weeks ago, Alibaba embarked on the "most important organizational change", forming a new 1+6+N structure, announcing that it would set up six major business groups and a number of business companies, including Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, Cainiao, International Digital Business, and Dawen Entertainment.

What is the significance of Taobao and Tmall's adjustment from two different sets of platform mechanisms to full integration, and now setting up three major industry development departments on the industry operation side?

Which departments have been adjusted? What is the logic?

Judging from the official announcement of Taobao Tmall Business Group, on the user side, the three major user products of homepage, search and live broadcast remain unchanged; On the industry operation side, we will continue to manage and operate according to the industry consumption characteristics and user demand scenarios, and establish three industry development departments, which are responsible for Qigong (Wang Hai), Owen (Liu Peng) and Yiman (Liu Yiman), respectively, to report to CEO Dai Shan. The person in charge of the former industrial operation center, Chuixue, is about to leave due to personal reasons. Some insiders said that in 2022, Blowing Snow has expressed this intention to the group's leadership.

"The establishment of three industry departments can better achieve business focus and resource optimization, and grouping similar businesses into the same department can more concentrate resources and forces and improve business efficiency and competitiveness." In addition, it can better meet the needs of consumers. Speaking of the organizational adjustment of Taobao Tmall Business Group, Hong Yong, associate researcher of the E-commerce Research Institute of the Research Institute of the Ministry of Commerce, said in an interview with The Paper that by paying attention to the development and needs of different industries, the three major industry sectors can better grasp the development trend of the industry and launch corresponding solutions and services to meet the different needs of consumers.

The first part of industry development is responsible for Qigong, aggregating diversified supply capabilities covering the national industrial belt, including Taobao clothing, trendy play, pets, enterprise clothing and other industries, highlighting non-standard and characteristic goods, characterized by rich supply.

The second department of industry development is responsible for Owen, and the integration platform is the main position advantage of brands at home and abroad, including power consumption, Tmall clothing, home decoration, beauty, sports and outdoor industries, Tmall Global, Tmall luxury and other businesses, with brand favorability as the main reason for consumer decision-making.

The three departments of industry development are responsible for Yiman, including Taoxianda, Tmall Supermarket, Taocai Cai and other businesses and the food fresh industry, providing a variety of fulfillment services such as tomorrow delivery, half-day delivery, and hourly delivery, with daily shopping needs and timeliness as the main reasons for consumption decision-making.

The organizational adjustment did not issue a letter of all employees as before, and insiders revealed that Dai Shan emphasized "doing things well first." The three major industry departments have not yet been named, and Dai Shan hopes to encourage the number one department to be creative and lead the team to open up business space.

Before the official announcement, there were media reports that Taobao Tmall Business Group split the industrial operation center into three industry development departments. However, judging from the above official announcement information, this adjustment is not simply to split the department that Chuixue was previously responsible for, but the internal adjustment of the entire Taobao Tmall. Some media also pointed out that the three industry development departments of Taobao Tmall are no longer titled Taobao and Tmall, compared with the previous practice of independent and industry merger operation of the two brands, this adjustment is equivalent to making the two brands operate more independently.

It is reported that before Ali formed a 1+6+N architecture, the two core businesses of Alibaba's e-commerce, Taobao and Tmall, announced the full integration of the background in 2022, when Ali established an industrial operation and development center, a platform strategy center, and a user operation and development center on the basis of adhering to the dual-brand operation of Taobao and Tmall. Before last year's adjustment, although Taobao and Tmall shared the Taobao app, they had two different platform mechanisms. Taobao focuses on small and medium-sized merchants and diversified long-tail suppliers, while Tmall focuses on service brand merchants.

Regarding whether Alibaba's formation of a 1+6+N structure means that Taobao Tmall Business Group will independently face the external business environment, Hong Yong told The Paper: "The spin-off does not mean that Taobao Tmall will face the external competitive environment completely independently." In the future, Taobao Tmall will continue to face challenges from the global market together with other business units. ”

Has the entity changed?

After Alibaba's formation of the 1+6+N structure, which company is the operating entity of Taobao Tmall Business Group, and has there been any changes? As of press time, Ali did not comment.

The surging news reporter inquired about the Taobao APP software license agreement, the user signed the agreement is Taobao (China) Software Co., Ltd., and the privacy policy of Tmall APP shows that the providers of Tmall services are Zhejiang Tmall Network Co., Ltd. and Zhejiang Tmall Technology Co., Ltd.

According to the national enterprise credit information publicity system, Taobao (China) Software Co., Ltd. was established in 2004 with a registered capital of 691.21 million US dollars, Zhejiang Tmall Technology Co., Ltd. was established in 2010 with a registered capital of 114.74 million US dollars, the legal representative is Dai Shan, and Zhejiang Tmall Network Co., Ltd. was established in 2011 with a registered capital of 10 million yuan, and the legal representative is Yang Guang. According to the Tianyancha APP, Taobao (China) Software Co., Ltd. and Zhejiang Tmall Technology Co., Ltd. are 100% owned by Taobao China Holdings Co., Ltd.

Ali has said that after the organizational adjustment, qualified business groups and companies will have the possibility of independent financing and listing, but in an Alibaba conference call on March 30, Alibaba's chief financial officer Xu Hong, in response to which business segment will be listed independently, pointed out that in all business sectors and business companies, except for the current Taobao Tmall Business Group, all other business groups and business companies will form independent financing and spin-offs, including looking for independent listing entities. Ali believes that the entire market is the best touchstone, "In the future, all qualified business groups and companies, when they have independent financing and listing entities, we will be ready to go one on the other." After they go public, they are further evaluated about their importance to the Alibaba Group as a whole to decide whether to maintain control or whether they can relinquish it. Xu Hong said.

On the evening of February 23, Alibaba Group announced its results for the third quarter of fiscal 2023 (fourth quarter of 2022), with quarterly revenue up 2% year-on-year to RMB247.756 billion, market expectations of RMB245.183 billion, adjusted EBITA (earnings before interest and taxes) up 16% year-on-year to RMB52.048 billion, and non-GAAP net profit of RMB49.932 billion, up 12% year-on-year, both better than market expectations. Non-GAAP earnings per ADS were $19.26 and diluted earnings per share were $2.41, both up 14% year-over-year.

According to the financial report, in the quarter ended December 31, 2022, Taote, Taocaicai, Ele.me, Hema and other businesses achieved a significant year-on-year narrowing of losses, and Youku has narrowed its year-on-year losses for seven consecutive quarters, but Taobao and Tmall's online physical goods GMV (excluding unpaid orders) recorded a single-digit decline year-on-year.

Alibaba explained in its earnings report that Taobao and Tmall's online physical goods GMV (excluding unpaid orders) recorded a single-digit year-on-year decline, mainly due to reduced consumer demand, continued competition, and the impact on supply chain and logistics in December due to the new crown epidemic. The decline in GMV was mainly due to weak demand in the apparel category, partially offset by accelerated growth in health products, pet care and fresh products, and a narrowing decline in the consumer electronics category.

As of December 31 last year, the number of consumers who spent more than RMB 10,000 on Taobao and Tmall remained at about 124 million, with a retention rate of 98%.