By Radar Finance | Written by Xiao Sa | Edited by Shen Hai

Jiang Fan will continue to lead Alibaba's e-commerce business.

On November 21, Alibaba announced on the Hong Kong Stock Exchange that it has established the Alibaba E-commerce Business Group, fully integrating e-commerce operations such as Taobao and Tmall, Alibaba International Digital Commercial Group, as well as 1688 and Xianyu, to form a business cluster covering the entire industry chain both domestically and internationally. Jiang Fan has been appointed as the CEO of the Alibaba E-commerce Business Group.

Jiang Fan is no stranger to the public, known for being a "fighter" and Alibaba's "youngest partner." During his tenure at Taobao, he helped Alibaba make the daring leap from the PC era to the mobile era. In his nearly three years leading Alibaba International, he once again proved his capabilities. According to Alibaba's financial reports, in the third quarter of this year, Alibaba's overseas revenue increased by nearly 30% year-on-year, standing out within the company.

Despite setbacks, Jiang Fan, who achieved "redemption" overseas, is the only executive among Alibaba's younger generation to have led both domestic and overseas e-commerce operations. These advantages make him almost the most suitable candidate to lead the Alibaba E-commerce Business Group.

If Jiang Fan's return is not surprising, the integration of domestic and international e-commerce operations reflects Alibaba's new development strategy under a new round of adjustments. In the view of market participants, over the past year, Taobao and overseas e-commerce have been moving towards integration, and many domestic merchants have found new growth opportunities through this pilot program. The current integration indicates that Alibaba hopes to achieve even greater market growth through this move.

However, despite his reinstatement, Jiang Fan also faces the challenge of restoring rapid growth to the Taobao and Tmall Group under high investment and reducing losses at the International Digital Commercial Group.

Jiang Fan Returns to Lead Alibaba's E-commerce Business

Jiang Fan achieved fame at a young age. At 18, he was admitted to the Department of Computer Science at Fudan University after winning the first prize in the provincial division of the National High School Olympiad in Informatics.

After graduating in 2006, he joined Google China, where Huang Zheng, the founder of Pinduoduo, was also an employee. However, their paths crossed for less than a year; Huang Zheng left Google in 2007, while Jiang Fan founded the mobile developer service platform Umeng in April 2010.

In 2013, Alibaba acquired Umeng for US$80 million, bringing Jiang Fan into the Alibaba fold and paving the way for his successful career.

At that time, Taobao and Alipay dominated the PC era but struggled to make the transition to mobile. Jiang Fan, as the newcomer, became the game-changer.

Starting in 2014, Jiang Fan began promoting the development of the Taobao mobile app. With his team's efforts, the daily active users of the mobile app soared from 30 million to 110 million in just one year. Jiang Fan then led Taobao in innovating around content and intelligence.

After this achievement, Jiang Fan gained fame within Alibaba, becoming President of Taobao in 2017 and concurrently serving as President of Tmall in March 2019. At just 33 years old, he joined Alibaba's list of partners.

After taking charge of Taobao and Tmall, Jiang Fan attracted increased attention from the outside world and was once considered a successor to Alibaba's CEO.

However, an unexpected incident occurred.

According to reports, in April 2020, Jiang Fan's wife, Dong Huahua, publicly named internet celebrity Zhang Dayi on Weibo: "This is the first and last warning to you. If you mess with my husband again, I won't be polite. I'm not someone to be trifled with. Please behave yourself."

Rumors about Jiang Fan and Zhang Dayi surfaced. Following the incident, Jiang Fan faced a severe public relations crisis due to improper handling of personal family issues and was removed from Alibaba's list of partners. He officially stepped down as President of Taobao, Tmall, and Alimama in January 2022, shifting his focus to overseas digital commerce.

At that time, Alibaba's overseas market had 285 million annual active consumers, but there was still a significant gap from the goal of 1 billion overseas users. Meanwhile, competitors like Douyin and Tencent were also quietly expanding their cross-border e-commerce and overseas businesses.

Looking back, Jiang Fan did not disappoint. According to "LatePost," after taking over, he reorganized the business, forming a structure of two domestic cross-border businesses (AliExpress and Alibaba.com) and four overseas local businesses (Lazada, Miravia, Trendyol, and Daraz), introducing fully managed, semi-managed, and self-operated models.

In the nearly three years since Jiang Fan took over, the overseas business has become the fastest-growing segment within Alibaba Group. According to Alibaba Group's fiscal second-quarter 2025 report (July 1 - September 30, 2024), the Alibaba International Digital Commercial Group continued to lead with a 29% revenue growth rate, generating revenue of RMB 31.672 billion for the quarter. This strong performance was driven by cross-border business growth, particularly the AliExpress Choice business.

In terms of revenue scale, Alibaba's international business ranked second within the group, after Taobao and Tmall Group's RMB 99 billion and slightly ahead of Cloud Intelligence Group's RMB 29.6 billion and Cainiao Group's RMB 24.6 billion.

With the high growth of the international business he led, Jiang Fan returned to the spotlight. As early as July 21 last year, Alibaba's fiscal 2023 report revealed that Jiang Fan had reappeared on Alibaba's list of partners.

According to media reports, on November 21, Wu Yongming, CEO of Alibaba Group, sent an email to all employees announcing the establishment of the Alibaba E-commerce Business Group, integrating domestic and international e-commerce operations, including Taobao and Tmall Group, Alibaba International, and the strategic businesses of 1688 and Xianyu.

Jiang Fan will serve as CEO of the E-commerce Business Group, reporting to Wu Yongming.

According to Tianyancha, Jiang Fan currently holds positions in six companies. Among them, Xizang Yuanying Enterprise Management Partnership (Limited Partnership) has the highest registered capital of RMB 200.7139 million, of which Jiang Fan holds a 5.57% stake.

Domestic "base" faces a bottleneck

Compared to the high growth of international business, Alibaba's domestic e-commerce segment, represented by Taobao and Tmall, seems to have lost its shine.

According to iFinD data, in the second quarter of fiscal 2025, Alibaba achieved overall revenue of RMB 236.503 billion, a year-on-year increase of 5%; net profit was RMB 43.547 billion, a year-on-year increase of 63%; and adjusted EBITA decreased by 5% year-on-year to RMB 40.561 billion.

According to the financial report, the decline in adjusted EBITA was mainly due to increased investment in e-commerce operations, partially offset by revenue growth and operational efficiency improvements.

Specifically, in this fiscal quarter, the Taobao and Tmall Group generated revenue of approximately RMB 99 billion, a year-on-year increase of 1%, accounting for 42% of Alibaba's overall revenue.

The China Retail Business segment of the Taobao and Tmall Group generated revenue of RMB 93.008 billion, a slight year-on-year increase of 0.48%. Among them, customer management revenue was RMB 70.36 billion, a year-on-year increase of 2%; wholesale business revenue increased by 18% year-on-year; and direct sales business decreased by 5% year-on-year.

The Taobao and Tmall Group encompasses Alibaba's retail platforms, including Taobao, Tmall, Xianyu, Tmall Supermarket, Tmall Global, and the wholesale platform 1688, constituting Alibaba's "base."

However, in recent years, the growth of the Taobao and Tmall Group has been unsatisfactory. In fiscal 2023 and 2024, the group's revenue declined by 1.68% and 25.37%, respectively. In the first quarter of fiscal 2025, Taobao and Tmall remained the only business group within Alibaba to report negative revenue growth.

Although this quarter reversed the downward trend from the previous quarter, due to increased investment in user experience, the adjusted EBITA of the Taobao and Tmall Group was RMB 44.59 billion, a year-on-year decrease of 5%.

A research report by Macquarie stated that although the monetization of the Taobao and Tmall Group has improved, coupled with the impact of Taobao service fees throughout the quarter, it should have led to better results. However, the report believes that subsidy programs, live streaming, and other under-monetized tools in flash sales, as well as the commitment to further invest in user experience, will continue to affect the company's profitability and make the profit margin performance of the Taobao and Tmall Group more volatile.

While the profitability of the Taobao and Tmall Group is being tested, Alibaba's other businesses are also under considerable pressure.

In this fiscal quarter, Cainiao Group generated revenue of RMB 24.647 billion, a year-on-year increase of 8%; the Local Life Group's revenue increased by 14% year-on-year to RMB 17.725 billion; while the revenue of the Cloud Intelligence Group and the Digital Media and Entertainment Group increased by 7% and -1%, respectively.

However, among these major businesses, only Alibaba Cloud achieved an adjusted EBITA profit of RMB 2.661 billion, a year-on-year increase of 89%; Cainiao's adjusted EBITA for this fiscal quarter decreased by 94% year-on-year to RMB 55 million, while the other major businesses incurred losses.

Specifically, the Alibaba International Digital Commercial Group reported an adjusted EBITA loss of RMB 2.905 billion, a year-on-year increase of 657%; the Local Life Group reported an adjusted EBITA loss of RMB 391 million; and the Digital Media and Entertainment Group reported an adjusted EBITA loss of RMB 178 million.

Alibaba stated in its financial report that the losses of the International Digital Commercial Group were mainly due to increased investment in cross-border operations of AliExpress and Trendyol.

Regarding this, the above-mentioned Macquarie research report mentioned that the Alibaba International Digital Commercial Group (AIDC) department's profit margin performance was weak, with an adjusted EBITA of -9.2%, and noted that investments in "Trendyol" and "Global AliExpress" market share, as well as its new "AliExpress Oil Plan" model, may continue to affect the profit margin of the AIDC department.

Integration aims to seek greater growth

As the growth bottleneck in domestic e-commerce becomes increasingly apparent, the overseas market, where opportunities still exist, has naturally become one of the few incremental outlets that Alibaba needs to seize firmly.

"In this rapidly evolving era, the 25-year-old Alibaba must continue to innovate with an entrepreneurial mindset, fulfill its mission of serving small and medium-sized enterprises, and continuously create value for society," Wu Yongming said in an email to all employees. Both China and the global e-commerce landscape are entering a new era, and global supply chain capabilities, fulfillment capabilities, and consumer service capabilities will determine the future competitive landscape."

Wu Yongming stated that the Alibaba E-commerce Business Group will integrate all e-commerce resources within the group to leverage years of accumulated capabilities to serve domestic and global consumers while helping more small and medium-sized enterprises simultaneously expand their domestic and overseas markets.

Bai Wenxi, Chief Economist for China at the China Enterprise Capital Alliance, told Radar Finance that the integration of domestic and international e-commerce operations is another major move by Alibaba after more than a year of "spin-offs," achieving integration and connectivity among business segments, especially the first integration of domestic and international e-commerce operations. This centralized resource allocation can help respond to global market competition and accelerate the internationalization process for small and medium-sized enterprises utilizing Alibaba's platform and resources.

In fact, from an external perspective, Alibaba faces challenges from Pinduoduo and Douyin in the domestic market, while international competitors include SHEIN, Pinduoduo's TEMU, and the rising TikTok Shop e-commerce platform.

At the same time, as Wu Yongming pointed out, competition in the e-commerce landscape has entered a new phase. Among leading e-commerce platforms, competition is no longer limited to a single market or supply chain.

From this perspective, Alibaba's integration of domestic and overseas e-commerce is timely and reasonable. According to reports, over the past period, Taobao and overseas e-commerce have been moving towards integration. In July this year, Taobao launched the "Global Free Shipping Plan for Apparel," with Taobao responsible for merchant recruitment and supply, while overseas logistics and user operations are handled by the Alibaba International Digital Commercial Group.

In September, Alibaba upgraded this project to the "Taobao and Tmall Overseas Growth Plan," initiating merchant recruitment across all industries and categories. During Tmall's "Double 11" shopping festival, relevant personnel from the Taobao and Tmall Group revealed that among the merchants participating in the Taobao and Tmall Overseas Growth Plan, nearly 70,000 merchants experienced double revenue growth.

For Alibaba, leveraging the rich supply from Taobao, Tmall, and 1688 and connecting it with the consumers and overseas users accumulated through Alibaba's international e-commerce operations is undoubtedly the most efficient way to enjoy the benefits of new overseas growth.

However, whether it's the core revenue of Taobao and Tmall, cross-border e-commerce, or the revenue growth of Cainiao's cross-border logistics, it comes at a cost of increased investment.

During the second-quarter financial report conference call, Wu Yongming stated, "Over the past few months, amid the intensifying market competition in the e-commerce industry, Taobao and Tmall have made breakthroughs in retaining core users and attracting new users. We will continue to invest in our core business, improve the operational quality of each business, and are confident in our future development.""

How can Jiang Fan restore rapid growth to Taobao and Tmall under high investment and reduce losses at the International Digital Commercial Group? In the view of many market participants, Jiang Fan faces considerable pressure going forward.