From E-Commerce Giant to Diversified Conglomerate: Alibaba’s Evolution and Turnaround Strategy

In recent years, Alibaba, once a symbol of Chinese e-commerce success, has faced a series of challenges that have tarnished its reputation. The company was fined a record $2.8bn in 2021 for monopolistic practices and co-founder Jack Ma took a step back from the spotlight, further causing concern.

Despite these setbacks, Alibaba’s competitors like PDD and ByteDance have excelled in meeting the needs of budget-conscious consumers and adapting to new trends like “social commerce.” This has resulted in a significant decline in Alibaba’s market value, dropping below $170bn in late 2022.

To combat this downward trend, Alibaba made the strategic decision to split into six separate entities in March of the following year. These included a logistics business (Cainiao), a cloud computing division (Aliyun), an international e-commerce arm (featuring platforms like AliExpress), a digital services company (including food delivery app Ele.me), and a small media group. Alibaba proper retained its domestic retail operations, focused on Taobao and Tmall, which generate the majority of the company’s revenue.

This move allowed Alibaba to diversify its portfolio and focus on different areas of growth beyond e-commerce. It remains to be seen whether this strategy will pay off in the long run, but for now it seems that Alibaba is determined to recover from its recent setbacks and continue as one of China’s largest technology companies.