Produced by | He Xi | Typeset by | Ye Yuan

Jiang Fan returns to the spotlight at Alibaba!

At the end of November, Alibaba Group CEO Wu Yongming sent an email to all employees announcing the establishment of the Alibaba E-commerce Business Group and appointing Jiang Fan as its CEO. Jiang Fan will oversee core businesses such as Taobao and Tmall Group, as well as International Digital Commerce. According to the internal email, the "Alibaba E-commerce Business Group" will fully integrate Taobao and Tmall Group, International Digital Commerce Group, 1688, Xianyu, and other e-commerce entities to form a cohesive business unit spanning the entire domestic and international supply chain.

With Alibaba's declining performance becoming increasingly evident, why did the company choose Jiang Fan to lead this new e-commerce business group? Can Jiang Fan help Alibaba craft a new narrative for global e-commerce?

01

Why Was Jiang Fan Selected as CEO of Alibaba's New E-commerce Business Group?

Jiang Fan, a top student in the computer science department at Fudan University, began his career at Google China, contributing to projects like Google Maps, search, and content advertising. After an entrepreneurial stint at Youmeng, he joined Alibaba, invited personally by Daniel Zhang. From 2013, Jiang Fan spearheaded the growth of Taobao Mobile's daily active users from 30 million to 110 million. He later served as president of Taobao and Tmall, becoming one of Alibaba's youngest partners and a rising star in the internet economy. Wang Xing, the founder of Meituan, considered him the most likely "CEO successor" for Alibaba's future.

In April 2020, a rumored affair with internet celebrity Zhang Dayi thrust Jiang Fan into the spotlight. Amidst public scrutiny, Alibaba demoted him, gave him a major demerit, and revoked his partnership status. He was subsequently transferred to Alibaba's overseas department to oversee the expansion and operation of international markets. At the time, many believed that Jiang Fan had been essentially "exiled" and would struggle to return unless he could "prove his irreplaceability."

Before Jiang Fan took over International Digital Commerce, Alibaba's overseas ventures were still in their nascent stages, with unremarkable performance. Reviewing Alibaba's previous financial reports, it's evident that before 2021, the company's overseas business accounted for a minuscule portion of its overall revenue, overshadowed by star businesses like Alibaba Cloud and Cainiao.

Jiang Fan transformed Alibaba's overseas operations. Under his leadership, the overseas business segment has been on the rise since late 2022, maintaining double-digit growth for multiple consecutive quarters.

Alibaba's latest quarterly financial report highlights the impressive performance of its overseas business segment. As of September 2024, Alibaba's International Digital Commerce revenue grew significantly, accounting for 13.4% of total revenue, making it the second-largest business segment after Taobao and Tmall Group. Specifically, International Digital Commerce reported revenue of 31.672 billion yuan (approximately $4.513 billion), a 29% increase from the same period last year.

Compared to other Alibaba business segments, its overseas operations stand out. In this quarter's financial report, Taobao and Tmall Group reported revenue of 98.99 billion yuan, a 1% year-on-year increase. China Retail Commerce reported revenue of 93 billion yuan, unchanged year-on-year, while China Wholesale Commerce reported revenue of 5.99 billion yuan, a 18% year-on-year increase. The Cloud and AI Group reported revenue of 29.61 billion yuan, a 7% year-on-year increase. The International Digital Commerce Group reported revenue of 31.67 billion yuan, a 29% year-on-year increase. Cainiao reported revenue of 24.65 billion yuan, an 8% year-on-year increase. The Local Services Group reported revenue of 17.72 billion yuan, a 14% year-on-year increase; the Digital Media and Entertainment Group reported revenue of 5.69 billion yuan, a 1% year-on-year decrease.

Alibaba's financial reports underscore why Jiang Fan was chosen as CEO of the new e-commerce business group – he's truly capable!

02

Jiang Fan: The "General" Leading Alibaba Forward

Alibaba appointed Jiang Fan as CEO of the new e-commerce business group not only due to his past achievements but also because of his comprehensive skills in innovation, platform operations, and territorial expansion, which are currently most needed by Alibaba.

Alibaba faces numerous challenges, including market competition, business growth, and user acquisition anxiety.

In terms of market competition, Alibaba must contend not only with long-standing rivals like JD.com but also with emerging players like Pinduoduo, Douyin E-commerce, and Kuaishou E-commerce.

Pinduoduo surpassed Alibaba in active buyers in 2020 and overtook Alibaba in market capitalization in November 2023, becoming China's largest e-commerce platform. Despite continuous evolution at Taobao and Tmall, competitive dynamics persist.

Beyond Pinduoduo, Douyin and Kuaishou E-commerce are also diverting market share from Taobao and Tmall. According to data released by the Ministry of Commerce and industry insiders' analysis, Taobao and Tmall accounted for 45% of the e-commerce market in 2023. Based on estimated national online retail sales of 15.42 trillion yuan that year, Taobao and Tmall's GMV was approximately 7 trillion yuan. Douyin E-commerce's total GMV in 2023 was approximately 2.7 trillion yuan, while Kuaishou's financial report showed its annual GMV for 2023 was 1.2 trillion yuan.

The data reveals that besides Pinduoduo, Douyin and Kuaishou E-commerce are emerging as formidable competitors for Taobao and Tmall. Douyin, in particular, has witnessed astonishing growth. Data indicates that Douyin Mall's GMV increased by 277% year-on-year in 2023. There were reports in mid-2024 that "Douyin E-commerce's GMV target for 2024 is 4 trillion yuan." At Douyin E-commerce's growth rate, Taobao and Tmall will face even fiercer competition in the future.

In terms of business performance, Alibaba's core e-commerce segment is experiencing sluggish growth, and many other businesses are unprofitable or underperforming. In core e-commerce, Alibaba's revenue growth rate is gradually slowing down and even showing a downward trend. Taking Taobao and Tmall Group as an example, under intense competitive pressure, its competitive edge is narrowing, and revenue growth potential is limited. In other businesses, whether it's the digital media and entertainment segment or the Alibaba Cloud segment, they are either incurring operating losses or need to improve profitability. Even Alibaba's overseas business segment is still in a period of significant investment.

Under these circumstances, Alibaba desperately needs a "general" who can withstand domestic competitive pressures, expand territories in overseas markets, and integrate domestic and international resources.

Jiang Fan has demonstrated his capabilities both internally and externally. Internally, the mobile Taobao app he developed once accounted for over 80% of Taobao's transactions. He drove the youthful and digital transformation of e-commerce businesses, led the development and promotion of Taobao Live, and possesses keen insight, strong operational execution, and innovation capabilities. Externally, Jiang Fan transformed Alibaba's overseas business from an afterthought into the second-largest business outside of Taobao and Tmall Group, achieving the highest growth rate in just three years.

Jiang Fan is the "general" Alibaba needs.

03

Can Jiang Fan Craft a New Narrative for Alibaba's Global E-commerce?

Undoubtedly, Jiang Fan is Alibaba's most capable "general" both internally and externally. However, facing Alibaba's requirement to integrate domestic and international resources to form a synergistic development and craft a new narrative for global e-commerce, can Jiang Fan succeed?

Alibaba Group CEO Wu Yongming stated in an internal letter: "At this new starting point, the group has decided to establish the Alibaba E-commerce Business Group and appoint Jiang Fan as its CEO, reporting to me. The E-commerce Business Group will fully integrate e-commerce entities like Taobao and Tmall Group, International Digital Commerce Group, 1688, and Xianyu to form a cohesive business unit spanning the entire domestic and international supply chain."

Both China's and the global e-commerce landscapes are entering a new era where global supply chain capabilities, fulfillment capabilities, and consumer service capabilities will determine the future competitive landscape. The Alibaba E-commerce Business Group will integrate all e-commerce resources within the group to unleash years of accumulated capabilities, serve domestic and global consumers effectively, and simultaneously help more small and medium-sized enterprises expand into both domestic and overseas markets.

Wu Yongming explicitly assigned Jiang Fan two tasks in the internal letter. The first is to integrate all e-commerce resources within the group to serve domestic and global consumers, a ToC task. The second task is to help more small and medium-sized enterprises expand into both domestic and overseas markets, a ToB task.

These tasks not only test Jiang Fan's multi-platform management and operational capabilities but also his ability to create momentum, increase traffic, and attract users.

For Jiang Fan, while sorting out and integrating Alibaba Group's resources is challenging, it's not impossible. The real hurdle lies in competing with rivals to attract customers both domestically and internationally. Globally, Alibaba's competitors include not only Pinduoduo, Douyin, JD.com, but also powerhouse players like Amazon, Temu, SheIn, Shopee, and others.

Domestically, Alibaba's market share is gradually eroding, but this is a gradual process. In the long run, while this erosion will put pressure on Alibaba, it won't undermine its fundamentals. Moving forward, as long as Alibaba focuses on its advantageous categories and continuously improves its pricing and service competitiveness, its future prospects remain promising.

The integration of domestic and overseas e-commerce significantly broadens Alibaba's e-commerce market, presenting higher growth potential. However, this poses a real test for Jiang Fan: how to integrate Alibaba Group's resources to build global supply chain capabilities, fulfillment capabilities, and consumer service capabilities. This requires continuous innovation and exploration from Jiang Fan and is a significant test of his management and operational skills. To succeed in these tasks, Jiang Fan must have sufficient authority, funding, and a clear global strategy and tactics.

In the past, under Jiang Fan's leadership, Alibaba's overseas strategy was diverse and flexible. In 2023, Jiang Fan focused on Global SpeedSell and Lazada, using "cost-effectiveness" as a sharp tool to promote the "cross-border + local" model. Taking Global SpeedSell as an example, after taking over, Jiang Fan launched the AE Mall program to support high-quality merchants and later developed independent applications for key countries, further strengthening localized operations. In March 2023, Global SpeedSell introduced "AliExpress Choice," featuring highly cost-effective products in categories like "under $5," "$5-15," and "above $15." Buyers can enjoy various services, including free shipping for orders over $10, delivery within 10 days, and up to three free returns per month. In 2024, Jiang Fan adjusted the marketing strategy. In March, AliExpress became an official partner of the 2024 UEFA European Championship (Euro 2024). In May, AliExpress signed football star David Beckham as its global ambassador.

While managing multiple platforms is challenging, attracting traffic is even more difficult. Although Jiang Fan has generated considerable traffic abroad, it's far from sufficient for Alibaba, a "traffic-hungry" giant. Continuously attracting substantial traffic will be crucial for Jiang Fan to craft Alibaba's global e-commerce narrative and lead Alibaba's e-commerce into a new era.