Jiang Fan takes full control, Taobao shifts to the big consumption sector

Author | Liu Baodan

Editor | Huang Yu

Driving low-frequency business transactions through high-frequency business is a new solution for internet giants to crack the traffic anxiety. As an e-commerce giant, Alibaba also plans to delve into this path.

On June 23, Alibaba Group CEO Eddie Wu announced that starting today, Ele.me and Fliggy will merge into Alibaba's China e-commerce business group, with Ele.me Chairman and CEO Wu Zeming (Fan Yu) and Fliggy CEO Zhuang Zhuoran (Nan Tian) reporting to the e-commerce business group CEO Jiang Fan.

This is not a simple adjustment, but an important strategic upgrade. Integrating instant retail and travel business into the e-commerce business group means that Taobao is transitioning from a single e-commerce platform to a large consumption platform.

Compared to the saturated e-commerce market, instant retail has vast market potential and is known for high-frequency transactions, which is very attractive to traffic-anxious shelf e-commerce platforms. Alibaba clearly does not want to miss this opportunity.

After more than a decade of development, the mobile internet industry is once again undergoing a major reshuffle, which will be an ecological battle that integrates online and offline capabilities, unifying e-commerce, instant retail, and travel into a super entrance.

The AI era is roaring in, and this will be an era with a stronger oligopolistic effect, where only the winners can continue to dominate.

Reuniting After Two Years of Splitting

This is an integration across three departments.

Ele.me originally belonged to Alibaba's local life group, one of its six major businesses, while Fliggy was one of many "N" businesses. This time, Alibaba has unified Ele.me and Fliggy into the e-commerce business group, which will encompass domestic and international e-commerce, 1688, Xianyu, Ele.me, and Fliggy into a super giant.

In terms of personnel, Wu Zeming will continue to serve as Ele.me Chairman and CEO, and Zhuang Zhuoran will continue as Fliggy CEO, both reporting to Jiang Fan. It is worth mentioning that Ele.me CEO Han Liu (Hao Chen) was recently taken away by the police for investigation due to suspected job-related crimes.

After the merger, Ele.me and Fliggy will still operate independently. Wall Street Insights has learned from internal sources that Ele.me and Fliggy will continue to maintain a corporate management model, aligning their business decision-making and execution with the centralized goals and unified operations of the China e-commerce business group.

Insiders told Wall Street Insights that the e-commerce business group was established last November, mainly including domestic and international e-commerce businesses. The purpose of establishing this business group is to strengthen the synergy of e-commerce operations, especially to lead more merchants to go overseas. Now, this department is no longer limited to e-commerce; Alibaba aims to explore new business models represented by instant retail and travel.

"This is our strategic upgrade from an e-commerce platform to a large consumption platform," Eddie Wu stated. In the future, Alibaba will optimize and integrate business models and organizational forms more from the user's perspective, creating a richer and higher-quality consumption experience for users.

Guo Tao, a special researcher at the E-commerce Research Center of the Internet Economy Institute, stated that by incorporating Ele.me and Fliggy into the China e-commerce business group, Alibaba is essentially deepening its key layout of the "e-commerce + local life" synergy strategy, aiming to build a more competitive consumption ecosystem through deep interaction among users, data, and business scenarios.

For Alibaba, unifying Ele.me and Fliggy under Jiang Fan is aimed at achieving an effect greater than 1+1, which has already been preliminarily validated in the collaborative operations between Taobao Flash Sale and Ele.me On April 30, Taobao Tmall's instant retail business "Xiaoshida" officially upgraded to "Taobao Flash Purchase," and it was displayed as a primary traffic entry point under the "Flash Purchase" tab on the Taobao app homepage. At the same time, Taobao Flash Purchase partnered with Ele.me to increase subsidies and launched an event to treat customers to 100 million cups of milk tea.

This was a very successful collaboration. According to Wall Street Insight, on May 5, the daily takeaway order volume of Taobao Flash Purchase on Ele.me exceeded 10 million orders. On May 26, the order volume surpassed 40 million, and on June 23, this number exceeded 60 million orders.

According to informed sources, in less than two months, the takeaway orders of Taobao Flash Purchase in collaboration with Ele.me increased sixfold, with the order volume reaching two-thirds of Meituan, significantly enhancing Ele.me's competitiveness.

"Both in terms of scale growth and efficiency, it has exceeded our expectations." At the fiscal year 2025 earnings call, Jiang Fan candidly stated that the company's attempts on Taobao Flash Purchase in the past two weeks exceeded expectations. He mentioned that the company would invest very actively in this business.

With Ele.me and Fliggy now under Jiang Fan's leadership, Alibaba will also usher in an era of large consumer platforms.

E-commerce War Escalates, Instant Retail Becomes New Battleground

If it weren't for JD.com's proactive involvement, Ele.me and Fliggy might not have reached the center stage of internet competition so quickly.

Seven years ago, Alibaba, in partnership with Ant Financial, acquired Ele.me for $9.5 billion, attracted by Ele.me's 3 million delivery riders, which could fill the gap in offline delivery for new retail. However, in the takeaway battle with Meituan, Ele.me gradually fell behind, maintaining a market share of around 30% for a long time.

Compared to the acquired Ele.me, Fliggy is a travel service platform incubated internally by Alibaba. An industry insider in the hotel and travel sector told Wall Street Insight that the domestic online travel market is mainly dominated by Ctrip and Meituan, and Fliggy's market share is not high.

For a long time, both Ele.me and Fliggy have been considered non-core businesses of Alibaba. In 2023, Alibaba underwent one of its most critical strategic adjustments in recent years, with the local life group that includes Ele.me being classified as one of Alibaba's six major businesses, while Fliggy was placed in other businesses alongside DingTalk and Hema. Against the backdrop of Alibaba's strategic focus on e-commerce and cloud computing, there have been multiple rumors about Ele.me being sold.

Until JD.com entered the fray, which made the possibility of reshuffling in the instant retail and travel markets visible. For Alibaba, Ele.me and Fliggy, as individual business units, find it difficult to cope with the continuous challenges from competitors like JD.com and Meituan, which forced Alibaba to make a choice, leading to this adjustment.

For Alibaba, with e-commerce growth slowing down, there is an urgent need for new growth points, and instant retail is undoubtedly the best choice. The Ministry of Commerce's "Instant Retail Industry Development Report (2024)" shows that in 2023, China's instant retail scale reached 650 billion yuan, a year-on-year increase of 28.89%, and it is expected to exceed 2 trillion yuan by 2030.

More importantly, Alibaba needs to activate low-frequency e-commerce users through high-frequency scenarios to enhance user stickiness on the Taobao app.

In the last quarter's earnings call, Jiang Fan stated that investing in instant retail could bring multiple benefits, "If we can establish such services on Taobao, it will lead to better long-term performance in terms of Taobao's activity and user scale." Alibaba has also seen some possibilities for integration between long-distance and short-distance e-commerce (providing goods and services based on consumer location within a close range). Jiang Fan stated, "We hope to actively invest in the near future to convert more Taobao users into instant retail users." In Jiang Fan's view, in the long term, this new business based on instant retail can upgrade Alibaba's business model.

Of course, this integration itself also poses significant challenges. Taobao Flash Purchase, Ele.me, and Fliggy are three independent business departments that require time for resource investment and team collaboration. Additionally, Ele.me and Fliggy, which fall under the e-commerce business group, may lower the potential ceiling of their independent business.

In terms of external competition, instant retail has become a battleground. For Alibaba, while directing Taobao traffic to Ele.me can bring in traffic, the key to breaking through lies in merchant supply and delivery efficiency. Ele.me still has a long way to catch up with Meituan.

Chen Liteng, a digital life analyst at the E-commerce Research Center of the Internet Economy Institute, believes that in the travel sector, there are vertical OTA platforms like Ctrip, Tongcheng Travel, Qunar, and Tuniu; in the instant retail space, platforms like Meituan, JD.com, and Douyin are competing for market share through differentiated layouts. "Alibaba needs to break through in organizational efficiency, business integration, and technological innovation to better achieve collaborative operations."

When Alibaba initially acquired Ele.me, it hoped to gradually integrate Ele.me into its ecosystem, but it was unsuccessful. Now, Alibaba has finally waited for a good opportunity to showcase its capabilities.

More importantly, as e-commerce platforms and instant retail platforms break down boundaries, the online and offline service capabilities are further integrated, there is a possibility of creating a "super APP" centered around consumer demand in the future, which is an opportunity that Alibaba must seize.

A new round of internet warfare has begun, and Alibaba, which has risen from the trough, is ready to start fighting