Alibaba restructures to focus on cloud computing and new retail

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Chinese internet giant Alibaba Group announced on Monday (November 26) a business structure reorganization that will sharpen its focus on cloud computing and new retail businesses. The reshuffle may be the last business restructuring before Jack Ma’s projected retirement in September next year.

Daniel Zhang, Alibaba’s Chief Executive Officer, said in an internal letter that its cloud-computing arm Alibaba Cloud business group will be upgraded to Alibaba Cloud Intelligence business group. Alibaba Group CTO Zhang Jianfeng is appointed as head of the unit, reporting directly to Daniel Zhang.

Alibaba has taken a lead in China’s cloud computing market thanks to an early layout. Alibaba Cloud represents 45.5% of the market in the country’s public cloud industry, according to China’s public cloud market report for H1 2018 conducted by research report firm IDC. Alibaba’s reinforcement on strategic importance of cloud computing sector is taking place against a backdrop of Tencent’s recent restructuring towards cloud-based data offerings for corporate clients. After the upgrade, Alibaba’s smart service capabilities such as data computing platform, advanced algorithms, database systems, infrastructure technology platform, and scheduling systems will be fully integrated with Alibaba Cloud and made available to the society, according to Zhang.

In addition, the company set up a new retail technology business group led by the former executive of Tmall’s technology unit Wu Zeming. The new group will integrate technological support from Alibaba’s enterprise-facing units as well as Taobao and Tmall.

This reorganization highlights the company’s efforts to transform its core e-commerce business with digital technology. Tmall Business Group is upgraded to “Greater Tmall”, which consists of Tmall, Tmall Supermarket, and Tmall Import/Export business unit. Although Alibaba is expanding into lots of sectors, finance, logistics, entertainment, and e-commerce still forms a huge chunk (86%) of the company’s revenue, according to the company’s Q3 financial report.

Driven by the AI trend, Alibaba puts AI on a higher priority. The company’s AI Lab has been integrated into Alibaba Group Innovation Initiatives business group, with the head of the lab reporting directly to the CEO.

In addition, Zhang also announced a series of new appointments for its logistics arm Cainiao, Alibaba Digital Media & Entertainment Group and big data marketing platform Alimama.