What: Alibaba consolidates its digital services by integrating Ele.me and Fliggy into main e-commerce operations as part of strategic transformation from traditional to consumer-focused platform.

Why it is important: The merger highlights how economic pressures and evolving consumer expectations are driving digital platforms to optimise their organisational structures for enhanced user experiences. Alibaba has announced a significant restructuring of its operations, merging its food delivery platform Ele.me and online travel agency Fliggy into its core e-commerce business. This strategic move comes as the Chinese tech giant adapts to challenging market conditions, including a prolonged property crisis and the economic impact of evolving US trade policies, which have affected consumer spending patterns. The consolidation represents a crucial step in Alibaba's transition from a traditional e-commerce company to a broader consumer-focused platform. This transformation is particularly significant given the intensifying competition in Chinese e-commerce, where platforms are aggressively expanding into "instant retail" with delivery times of just 30 to 60 minutes to attract customers. The company frames this reorganisation as a "strategic upgrade" aimed at optimising business models and organisational structures from the user's perspective. By streamlining operations and creating more integrated consumer experiences, Alibaba aims to strengthen its market position despite the challenging economic environment.

IADS Notes: Alibaba's June 2025 merger of Ele.me and Fliggy into its core e-commerce business follows a series of strategic restructuring moves throughout 2024-2025. This latest consolidation builds on November 2024's integration of domestic and international e-commerce operations under AIDC chief Jiang Fan's leadership, and January 2025's divestment of Sun Art Retail Group for HK$12.298 billion. The strategy aligns with broader market pressures, as evidenced by September 2024's first-ever decline in "618" shopping festival sales and intensifying competition in instant retail. The transformation reflects Alibaba's shift away from physical retail integration, following December 2024's sale of Intime department stores for $1.02 billion, as the company focuses on digital innovation amid challenging market conditions and evolving consumer behaviours.

Alibaba to merge food delivery, travel platforms into single e-commerce business