The move underlines the company’s two-prong strategy of expanding its business globally and maintaining a strong revenue stream in the Chinese market.
According to Chinese and Western reports with access to an internal memo, Alibaba is additionally looking to strengthen the ties between Alibaba and sister company Taobao.com to offer global vendors a wider range of distribution channels.
According to Chinese and Western reports with access to an internal memo, Alibaba is additionally looking to strengthen the ties between Alibaba and sister company Taobao.com to offer global vendors a wider range of distribution channels.
Reports add that Alibaba aims to bolster its focus on small- and medium-sized enterprises by launching two units designed to give customers access to its technology and teams of trained staff.
CEO David Wei is tapped to oversee domestic operations as well as continue his duties as chief executive, reports continue, while COO Elvis Lee will manage the international marketplace.
The shift is expected be in place as early as 1 August, when Alibaba is also expected to declare its intentions on the Hong Kong Stock Exchange.
Alibaba’s restructure runs in parallel with its plans to bolster its name internationally. Earlier this month, it announced the appointment of a lead creative agency in Europe, the Middle East and Africa as part of its US$30 million advertising campaign launched last year to promote its brand internationally.
David Wolf, CEO of Wolf Group Asia, said that while launching a large-scale advertising campaign to attract worldwide users to its site is good practice in the current e-commerce environment, the restructure may be a forced move as Alibaba has spread itself too thin.
“Alibaba has chosen to go wide and spread across global markets, but in China its competition is getting stronger and if it doesn’t focus on the domestic market, it may find it’ll be losing its leadership position,” Wolf said.
He further suggested that “Alibaba will publicise the fact that it is doing well”, and since it has not commented about its global advertising campaign, its venture may not be going as well as it would have wanted.
Christie Travers, corporate marketing manager of DHgate.com, a competitor of Alibaba, points out that hiring a creative agency in July, nine months after Alibaba launched its global campaign, is also indicative that its global push has struggled to gain traction.
However, she admits that, for a company of Alibaba’s capacity, pushing its brand outside its home market even during a recession is a step in the right direction.
“It has been tough recently so it’s smart for any business to look at where other opportunities lie. Alibaba is recognised on a domestic level and it does make sense that it would grow and establish leadership for these markets if it wants to make a legitimate push,” Travers said.
Representatives for Alibaba did not respond to phone calls by press time.
