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As part of a “strategic upgrade” and to broaden its “consumer experience,” Alibaba (NYSE:BABA) will combine its online travel agency and food delivery platform into an e-commerce group to capitalize on its artificial intelligence ambitions.
The restructuring “marks a strategic upgrade from an e-commerce platform to a comprehensive consumer platform. Moving forward, we will increasingly optimize our business models and organizational structures from the user’s perspective to create richer, higher-quality consumer experiences,” Alibaba CEO Eddie Wu said in a letter to employees quoted by media sources.
Following the combination of Ele.me and Fliggy, executives from each group will report directly to the head of Alibaba’s e-commerce business group, which also includes Tmall, Taobao, and the company’s international e-commerce businesses.
According to the South China Morning Post, Alibaba’s Ele.me offers delivery service on merchandise ranging from food to clothing to electronics offered on the Taobao platform. Within the first week after its launch in late April, Ele.me daily orders reached 10M, swelling to 60M currently, underscoring the company’s success at capitalizing on the popularity of “flash shopping” in China.
Alibaba (NYSE:BABA) shares have gained 33% since the beginning of the year, versus a 1.5% gain for the S&P 500.