Alibaba Restructures Business into Four Divisions, Emphasizing E-Commerce and Cloud AI.

Alibaba has restructured into four main divisions: Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and other businesses. The e-commerce segment includes Taobao, Tmall, and Ele.me, while the cloud and AI segment includes DingTalk, Cainiao, and Alibaba Health. The company is focusing on core sectors like e-commerce and cloud intelligence, exiting non-core assets.

Alibaba Group has recently announced a significant restructuring of its business operations, transitioning from a more complex organizational structure to a streamlined model with four main divisions. This move is part of the company's strategy to concentrate resources on its core sectors, including e-commerce and cloud intelligence.

The new structure consists of Alibaba China E-commerce Group, Alibaba International Digital Commerce Group, Cloud Intelligence Group, and a category for "other" businesses. The e-commerce segment includes popular platforms like Taobao, Tmall, and Ele.me. The cloud and AI segment encompasses services such as DingTalk, Cainiao, and Alibaba Health. This restructuring aims to enhance operational efficiency and focus on strategic growth areas.

The decision to restructure is a continuation of Alibaba's efforts to simplify its organizational structure, as seen in previous years. In March 2023, Alibaba Group initiated a reorganization of its "1+6+N" structure, which included six major divisions and numerous other businesses. The new structure aims to consolidate resources and reduce operational complexity.

Alibaba's focus on e-commerce and cloud intelligence is evident in its financial performance. The company reported a 5% year-over-year (YOY) increase in revenue for the second quarter of 2025, driven by growth in the Cloud Intelligence Group and international e-commerce segments. Despite a minor decline in adjusted earnings per share, Alibaba's net income surged by 58% to $6.25 billion, reflecting the strong performance of its cloud services and AI products.

The restructuring also includes a shift in the Local Life Group, with Ele.me being incorporated into the Alibaba China E-commerce Group and AutoNavi being categorized under "other" businesses. This adjustment signifies Alibaba's commitment to focusing on its core sectors and exiting non-core assets.

Alibaba's move to restructure is a strategic response to intensifying competition in the e-commerce and cloud computing sectors. As online retailers like PDD Holdings Inc. (Temu's parent company) and JD.com Inc. ramp up their efforts to boost revenue, Alibaba is investing heavily in its merchant network to maintain its competitive edge. This strategy, however, comes at a cost, as seen in the company's increased promotional spending and profitability pressures in certain segments.

In conclusion, Alibaba's restructuring is a strategic move to focus on its core sectors and enhance operational efficiency. The company's performance in the second quarter of 2025 reflects its commitment to growth in e-commerce and cloud intelligence, despite increased competition and profitability pressures. The future direction of Alibaba's "other" businesses, including AutoNavi and Cainiao, remains to be seen.

References:
[1] https://news.futunn.com/en/post/61042382/alibaba-s-restructuring-transitioning-from-the-1-6-n-model
[2] https://www.morningstar.com/news/marketwatch/2025082571/temus-parent-company-is-trying-to-fend-off-competition-from-alibaba-but-its-a-costly-fight
[3] https://finance.yahoo.com/news/ahead-alibaba-smart-car-spinoff-174021379.html