Chinese e-commerce giant Alibaba fights poor organization with restructure

Following criticism from Alibaba’s CEO that his company was having trouble getting organized, China’s leading online retail company announced Monday a plan to restructure the company that is intended to “drive synergy” between its different divisions, while simultaneously creating “reasonable safeguards” for them.

CEO Jack Ma admitted last month that Alibaba Group didn’t “know how to organize” in the face of unprecedented growth, but the company appears to have figured things out enough to reorganize.

The new structure will feature seven core business groups. Four of the groups manage its online shopping business: Taobao.com, eTao, Tmall.com and Juhuasuan, while the other three units cover international business operations, small business operations and cloud computing. Meanwhile, online payment service Alipay will remain “an affiliate” of the group.

One of the most prominent changes to the company is the decision to divide the Chinese-language and the English-language versions of Alibaba.com into separate groups, with leaders that will report directly to CEO Jack Ma.

Previously, the business-to-business website was led by a single CEO for the subsidiary. The domestic division will be led by Ye Peng, while Wu Minzhi will head the international side of Alibaba.com. Jonathan Lu, the site’s former CEO, now serves as the chief data officer for Alibaba Group.

Ma told employees in an email that the restructuring was meant to “foster the development of an open, collaborative and prosperous e-commerce ecosystem” and “establish reasonable safeguards for organizational mechanisms.” The company’s press release noted Ma as having said in the past that his goal for the company is to build a “seamless online environment” for its companies.

In May, Alibaba Group took Alibaba.com private with a deal to repurchase a 27 percent minority stake for roughly $2.45 billion, citing projected slowing membership growth as the reason.

That announcement came just days after Yahoo agreed to sell back its 40 percent stake of the whole company with an initial sale of 20 percent for $7.1 billion. The share buybacks are expected to remove a key obstacle in Alibaba’s path toward IPO.