Photo/Tuchong

June 19 (NBD) – Alibaba Group Tuesday unveiled a new shake-up in an internal letter sent by CEO Daniel Zhang, seven months after the organizational upgrade last November. 

Fresh groceries business Freshippo will be hived off into a standalone business and the enterprise software unit, DingTalk, will be folded into the cloud intelligence business group.

DingTalk serves as an important channel for Alibaba into the industrial Internet battlefield and new retail represented by Freshippo constitutes strategic extension of Alibaba's business, said Li Jinqing, an analyst with BigData-Research, explaining the logic behind the moves. 

The tech behemoth is also to revamp its innovation business group which will headed by Zhu Shunyan. Zhu will take charge of UCWeb and its mobile businesses, literature and music businesses.  

National Business Daily noticed that after the reshuffle, nearly half of the businesses once under the digital media and entertainment group will be carved out to the innovation business group.

An insider with the innovation unit explained, "Literature, music and UCWeb-related business will deliver stronger synergy effects, whereas video-streaming platform Youku, Alibaba Pictures and ticketing platform Damai are more tightly interconnected to each other."

According to Li Songlin, an analyst from iiMedia Research, literature can be promoted through UCWeb's products while the music part can be enhanced via Tmall Genie, the smart speaker business under the innovation business group. 

Furthermore, literature and music businesses attach importance to copyrights while Youku, Alibaba Pictures and Damai, focusing more on TV, film and entertainment, emphasize more on IPs, Li added.

Liu Deliang, founder of a research company, commented the music and literature units failed to perform well and connect with other segments under the digital media and entertainment business group. Liu deemed the split as an effort to lessen the burden of the business group and bolster its development with centralized advantageous resources.

Contents will remain a strategic focus of Alibaba's digital media and entertainment segment, said Wei Pengju, president of the cultural and economic research institute of Central University of Finance and Economics.

It's also noted that Maggie Wu, chief financial officer of Alibaba, will take over the strategic investment unit from executive vice-chairman Joe Tsai.

In Li Songlin's view, the comparatively frequent reorganization represents the tech giant's effort to adjust to the future development as Jack Ma, founder of Alibaba, is preparing to step down this September.

Email: gaohan@nbd.com.cn