In recent years, Alibaba has faced a series of challenges that have affected its e-commerce operations. In 2021, the company was fined $2.8 billion for engaging in monopolistic practices that were deemed harmful to customers and merchants. This hit Alibaba hard, and it also caused concerns about the future of the company.
As competitors such as PDD and ByteDance emerged as formidable adversaries, Alibaba struggled to keep up with the changing landscape of e-commerce. These companies proved adept at catering to cost-conscious consumers and adapting to new trends like “social commerce.” As a result, Alibaba’s market value plummeted from over $800 billion to below $170 billion in just two years.
To stem the tide of its declining fortunes, Alibaba made a decision to split into six separate entities in March of the following year. These new entities included a logistics business, a cloud-computing division, an international e-commerce operation, a digital-services arm, and a media group. The core Alibaba entity retained its focus on domestic retail operations primarily through its Taobao and Tmall marketplaces which generate most of the group’s revenue.
Despite these challenges, Alibaba remains one of China’s largest e-commerce companies and continues to be an important player in the global market. With this split into six separate entities, each with their own unique focus areas, it will be interesting to see how they navigate their respective markets in coming years.