Martech Brand Strategy E-commerce

Will Alibaba’s radical split unlock value for brands and marketers?


By Danielle Long, Acting APAC Editor

April 24, 2023 | 9 min read

Alibaba’s radical decision to split the business into six units could deliver a raft of new innovations and opportunities for brands and marketers, but what does it mean for the brand? The Drum spoke to China market experts to learn more.

Alibaba logo

Alibaba's restructure will spilt the ecommerce giant into six business units / Source:

Last month, Chinese e-commerce giant Alibaba announced its plans to overhaul the organisation, splitting the company into six business units, Cloud Intelligence, Digital Media and Entertainment, Cainiao Smart Logistics, Local Services, Global Digital Commerce, and E-commerce (Taobao and Tmall).

The six business units will sit under the Alibaba Group umbrella, which will continue to be led by CEO and chairman Daniel Zhang, and each individual unit will have its own CEO and board. Five of the units will be free to individually raise funds and explore IPOs – “when they are ready” – with the exception of the E-commerce unit, which will remain fully owned by Alibaba.

Announcing the split to the market, Zhang said the move aimed to provide greater agility for the individual business units within the holding company.

“Alibaba Group will be in the nature of a holding company that is the controlling shareholder of the business group companies. As the controlling shareholder, the Alibaba board will continue to have control over the boards of these new companies.”

“We believe this will allow all of our businesses to become more agile, enhance their business decision-making, and respond faster to market changes.

The restructuring is the most significant in Alibaba’s 24-year history and has been largely compared to Google’s creation of Alphabet in 2015.

The move has been viewed as an easing, if not ending, of the Chinese government’s crackdown on tech businesses. Beijing had been critical of the influence of China’s tech giants including Tencent, ByteDance, Didi, Baidu, Alibaba and Ant Group, and its sweeping regulatory changes are believed to have wiped around $500bn in value from these businesses collectively.

Decentralising the business solves this issue for the government, and analysts believe it could serve as an example for other Chinese businesses to follow. Which could herald the next rise of Chinese tech innovation.

What does the move mean for brands and advertisers?

Connie Chan, CEO of OMD China, believes it will be beneficial to brands and marketers which could benefit from increased investment and innovation in divisions such as Global Digital Commerce Group, the Digital Media and Entertainment Group and Cloud Intelligence Group, which includes Alibaba’s AI division.

“This could lead to new advertising and marketing opportunities, such as more sophisticated targeting and personalization, the ability to reach more customers in new markets, and the availability of more engaging and interactive ad formats.”

However, it could also mean that brands and marketers will need to adapt their strategies to navigate the new landscape.

“Each business unit will face unique opportunities and challenges, and their success would depend on market conditions, regulatory environments, and internal management," she said.

Chan says the move will provide the different units with greater agility as market conditions evolve.

"Mature businesses are typically used to support new businesses, and when mature businesses enter a decline, new businesses are used to drive growth. For Alibaba, this split into different business units means that core businesses can be separated from developing businesses.

"So perhaps the more mature business units of Taobao and Tmall will have more budget and more freedom in decision-making and investment in customer service and logistics to maintain its competitive advantage? Or that Youku and Tudou will have the flexibility to continue in digital media and entertainment?" she says.

Will it unleash new innovation?

James Bay, managing partner, Greater China. Wunderman Thompson, agrees that the move will open doors to greater innovations across the business, which could be a significant bonus for brands.

"The split also means each business group will focus on its own business innovations. Brands and marketers could ride on this shift to seek new ways of collaborating on Alibaba’s future innovations."

Alibaba's businesses have pioneered a massive amount of innovation across its various businesses - particularly e-commerce, AI and logistics, - the brand has been integral to the growth of social commerce and is credited with pioneering live-streaming for e-commerce, which has been hugely successful in China.

Bay said the move would help the internet giant get back to a start-up mentality, which would help unleash greater innovation.

“With the stagnant growth in new users and time spent in the Internet industry, Alibaba stressed the importance of “an entrepreneur mindset” - deepening the expertise in the existing business offerings to deliver higher value and better service to consumers. And this requires a more agile organization and more business decision power for each business group so that the business can react fast to the ever-changing consumer needs," he says.

Suggested newsletters for you

Daily Briefing


Catch up on the most important stories of the day, curated by our editorial team.

Ads of the Week


See the best ads of the last week - all in one place.

The Drum Insider

Once a month

Learn how to pitch to our editors and get published on The Drum.

Will the split harm the Alibaba brand?

Experts are divided about whether the split will have any impact on the brand either at home or abroad.

Despite the impact of the last few years, the Alibaba brand remains synonymous with China's e-commerce industry and innovation. Internationally it is often referred to as "China's Amazon" which is a nod to its strengths in logistics, cloud and media.

Chan argues it could confuse consumers; however, time will tell.

"Alibaba is a well-known brand in China so the split could dilute the overall brand and lead to confusion among consumers. However, outside China, the split may not have as much of an impact on brand recognition."

What does it mean for Tongyi Qianwen?

The restructure comes as the company announced its big play in the generative AI market with Tongyi Qianwen.

The launch, which sees Alibaba step up against the other major tech players, including Google and Microsoft, is certain to drive improvements in AI technologies and applications, according to Saurabh Madan, vice president & general manager for SEA, ANZ and Japan at MoEngage.

"Alibaba's Tongyi Qianwen is expected to be a game-changer in the AI industry, and its impact will be closely watched by businesses and experts around the world," says Madan.

"Its capability to process and translate multiple languages with high accuracy has the potential to improve cross-border communication for brands and marketers operating in SEA," continues Madan, "This tool can help marketers to communicate with customers and partners in other countries, potentially opening up new markets and opportunities for growth.

"In the long run, this technology is expected to capitalize on the rapidly expanding SEA market, where it can use its strong presence and ecosystem to gain a competitive advantage. Alibaba's Tongyi Qianwen has the potential to shift the balance of power in the global AI market."

However, Madan warns that China's regulatory and compliance rules - and the increasing concerns about data privacy, security and censorship, may restrict the growth of Tongyi Qianwen in countries outside of China.

Additional reporting by Preethi Ravi.

Martech Brand Strategy E-commerce

More from Martech

View all


Industry insights

View all
Add your own content +