Alibaba Appointed Retailing Cheif Jiang Fan as CEO to Grow E-commerce Momentum

On November 21, Alibaba (NYSE: BABA) announced that it appointed Jiang Fan as its CEO to integrate its China and overseas e-commerce business into one. Jiang Fan rejoined Alibaba as chief executive of Alibaba International Digital Commerce Group (AIDC) in 2024. For his appointment, e-commerce analyst, Li Chengdong, analyzed that the pressure on Alibaba's China's e-commerce business and its weaker-than-expected revenue may be the reason. Li asserted that Jiang's double management can ensure the consistency of business strategy. Chen Tao from Analysys Ark analyzed that Jiang’s good results in domestic and international e-commerce businesses made him the only candidate for the CEO position.

 

 

Historical records also prove the above viewpoints. When responsible for overseas business, Jiang made Alibaba's business revenue in the third quarter, 2024 grow 29% year-on-year, reaching $4.4 billion and becoming the fastest-growing business in Alibaba. However, this business is still loss-making.

 

At present, with the rise of Pinduoduo and TikTok e-commerce, it is challenging for Alibaba to secure the leading position in the e-commerce industry. Therefore, Jiang is expected to help Alibaba hold the industry leader position. Goldman Sachs report shows that from 2019 to 2023, the market share of Alibaba's Taobao and Tmall Group (TTG) fell from 66% to 45%, being exceeded by Pinduoduo last November. In the third quarter, TTG's revenue grew only 1% YoY and its income before interest and income tax fell about 5% YoY.

 

 

Given slowing growth rate and larger income decline, Li Chengdong analyzed that Jiang needed to solve the two challenges for Alibaba: the slowdown in domestic e-commerce growth and the loss of e-commerce users over industry competitors. Alibaba's management team agreed that synergizing and pulling together the company's businesses was a viable solution to these challenges. So, they chose Jiang to integrate Chinese and overseas e-commerce into one.

 

Looking ahead, analyst Chen Tao believes that the international market can enhance the growth rate of domestic business. Therefore, incorporating foreign business into the entire e-commerce operation system will make Alibaba's growth momentum better. In addition, Chen Tao believed that Jiang would increase its investment in AI to flourish its e-commerce business in the future because he mentioned that the application of AI drove the growth of international business.

 

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