Alibaba’s Transformation: Facing Monopolistic Practices, Competition and Split into Six Entities

Alibaba, once the epitome of Chinese e-commerce success, has been facing a series of challenges in recent years. In 2021, the company was hit with a massive fine of $2.8 billion for engaging in monopolistic practices that were deemed harmful to customers and merchants. To make matters worse, co-founder Jack Ma retired from the spotlight, sparking concerns about the company’s future.

As Alibaba struggled to navigate the changing landscape of e-commerce, competitors such as PDD and ByteDance emerged as formidable adversaries. These companies proved to be more 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.

In an effort to turn things around, Alibaba made the bold move of splitting into six separate entities in March 2021. 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 the majority of the group’s revenue.

Despite these challenges, Alibaba remains one of China’s largest and most successful companies. With its diverse range of businesses and services, it continues to be well positioned for future growth and success.