Text/Wang Huiying
Editor/Midnight
Following the launch of the 1+6+n organizational change in March last year, changes in various business groups within Alibaba are still happening, this time in local life.
html On March 1, Alibaba Group CEO Wu Yongming issued an internal letter to all employees of Local Life Group, announcing that Yu Yongfu, chairman of Alibaba Local Life Group and CEO of Ele.me, will step down at the end of Alibaba’s fiscal year (March 31). Management positions at Local Living Group.In the evaluation of Wu Yongming's internal email, he highly affirmed Yu Yongfu's performance, "He has been appointed in critical situations many times and made important contributions to the innovation and development of a number of businesses, laying a solid foundation for the growth of the team."
Indeed After joining Alibaba for ten years, Yu Yongfu led Alibaba to participate in many key battles. At the critical moment when he was appointed, Yu Yongfu successively took charge of Alibaba's Amap, Alimama, as well as Alibaba Pictures, Ele.me, ewtp Ecological Fund and other important businesses.
Yu Yongfu, picture source Alibaba official website
Especially after the adjustment of Alibaba’s local life organizational structure, under the leadership of Yu Yongfu, the local life business composed of "Feigaolao" (Fliggy, AutoNavi, and Ele.me) re-entered From the perspective of the outside world, Yu Yongfu is also known as the "Fire Captain", and Ali is constantly increasing its emphasis on local life.
At this time, the signal that Ali wants to send out is particularly important for those who once "fired" to withdraw from the front line of local life.
Judging from Yu Yongfu’s internal letter and Alibaba’s overall strategy, Yu Yongfu’s exit means that on the one hand, the local life business has been basically sorted out and stabilized. On the other hand, this is also a sign that Alibaba’s management is moving towards a younger generation. Mark, after this adjustment, the management who will take over Ele.me and AutoNavi are all born in the 1980s. Four minutes after the news of
’s personnel changes was sent out, Yu Yongfu also sent an internal letter to all employees of Local Life, saying that he was “proud to be an Alibaba employee” and had high hopes for Local Life Group.
However, local life is a tough one and the market competition is fierce. It has not yet reached the stage where "the predecessors plant trees and the descendants enjoy the shade". Especially for Alibaba, whoever takes over this banner has to push local life through the three major hurdles of profitability, growth, and business integration. The task will only be more arduous and the road ahead will be more difficult.
1. After fighting a tough battle with local life, Yu Yongfu resigned.
On the first day of March 2024, the mission of Yu Yongfu, one of Alibaba’s best professional managers and the “firefighting captain”, was completed.
, a key figure who has joined Alibaba for ten years and led the local life from 0 to 1, will resign from his management position in the local life team on March 31, bidding farewell to the front line of Alibaba's local life.
Saying goodbye to the front line of business does not mean leaving Alibaba. On the day of the personnel changes, Yu Yongfu also sent an internal letter to the local life team, revealing his next new destination.
"Today we are facing opportunities and unsolved problems in the two major markets of China and the world. How to innovate and solve problems has always been what everyone thinks and practices together. Today's business status and class committee capabilities of AutoNavi and Ele.me can make I feel relieved to let go, and I have the courage to make a new start in the international market in the next decade."
Yu Yongfu's new destination is the ewtp fund. This is where Yu Yongfu worked in Alibaba for the last time. When Yu Yongfu resigned from Alibaba Entertainment in 2017, he immediately served as the leader of the ewtp investment working group. At the same time, Yu Yongfu is still a partner of Alibaba.
Looking back on 2015, when Yu Yongfu was elected as a partner of Alibaba, it was unanimously approved. You must know that this vote is secret, and it is difficult to pass it unanimously. The confidence to support Yu Yongfu's unanimous vote cannot be separated from Amap. A major background of
is that after Alibaba acquired AutoNavi, it signed a gambling agreement with it, including "Within three years, AutoNavi will achieve 200 million daily active users." This was a difficult task for Gaode, whose DAU was less than 10 million at the time.
The more difficult the task is, the more key figures are needed to "put out the fire", and Yu Yongfu was entrusted with the important task. At the beginning of 2015, Yu Yongfu officially took over Amap. As soon as he took office, he decided to abandon o2o and commercialization and return to the map tool. At the end of January 2016, the number of Amap users exceeded 500 million.
Since then, under the leadership of Yu Yongfu, AutoNavi has assumed more and more responsibilities and has transformed from a simple map app into an open life service platform.
In 2020, Amap released the "Amap Guide" to enter the wine, travel and catering group purchase business, aiming directly at local life services; in 2021, Alibaba will adjust its organizational structure and integrate the three major businesses based on geographical location services, namely Amap, Local Life and Fliggy form the life service sector, which is managed by Yu Yongfu on behalf of the group; in March 2023, AutoNavi and Koubei will officially merge, and all local life-to-store businesses under Alibaba will be unified and integrated into the entrance of the AutoNavi map.
This also means that AutoNavi has become the core carrier of Ali’s local life-to-store/destination business, and even the “last hope” for Ali’s local life-to-store business. Yu Yongfu must fight on the front line.
continues to integrate and change, and Amap continues to develop. According to QuestMobile's statistics, from October 2022 to September 2023, AutoNavi's average MAU was about 760 million, ranking among the top 5; since 2021, AutoNavi's DAU has stably exceeded 100 million, and it exceeded 2.8 during the National Day in 2023. 100 million.
In terms of the more important positioning of local life, Amap has successfully completed its transformation into a taxi-hailing platform and a local life platform, and has maintained double-digit performance growth for nearly three years.
Another “fire-fighting” project is Ele.me, a local home-delivery business. Faced with the onslaught of competitors such as Meituan and Douyin, Ele.me’s life is not so easy.
Under the leadership of Yu Yongfu, Ele.me continues to reduce losses. Alibaba Holdings Group announced its third quarter results for fiscal year 2024, which showed that Ele.me’s losses continued to narrow significantly year-on-year, driving the local lifestyle group’s adjusted ebita (operating profit and loss) to accelerate to 2.068 billion yuan. Compared with the same period last year, the loss continued to narrow by 30% from 2.923 billion yuan, exceeding market expectations.
In the eyes of Alibaba employees, Yu Yongfu is a typical manager who "does not talk nonsense, does not just talk about ppt, and can fight tough battles"; in the email, Wu Yongming described Yu Yongfu as "many times in danger" and evaluated him as a leader in a group of businesses. It has made important contributions to innovation and development and laid a solid foundation for team growth.
However, Yu Yongfu left at this time, but Ali’s local life cannot be relaxed, because it is far from the time of victory.
2. Why is the manager changing at this time?
There is a saying circulating within Alibaba, "If you want to integrate, look for Yongfu." Not only because Yu Yongfu dominated the local life business, but also the UC and Alibaba entertainment businesses were inseparable from Yu Yongfu's integration capabilities.
replaced Yu Yongfu this time, perhaps because the tasks in the initial stage of local life have been completed: after the two-wheel drive strategy of Ele.me-Daojia and AutoNavi-Destination, the performance of local life business began to improve.
not only narrowed its losses, but also saw local life group orders increase by more than 20% year-on-year, annual active consumers continued to grow month-on-month, exceeding 390 million, and users' annual consumption frequency also showed strong growth year-on-year.
In the highly competitive local life battlefield, this is undoubtedly a good trend for Alibaba. However, although local life performance has improved, business losses are an indisputable fact, and there is still a long way to go before profitability.
At this point in time, the handover of the baton between the old and new coaches means that Ali has higher expectations for local life, which must achieve profitability as soon as possible in various ways.
If local life during the Yu Yongfu period was about learning to walk, then local life in the new stage is about learning to run. continues the idea of the entire Alibaba Group. Rejuvenating the management team and releasing more vitality is the first step.
In September last year, Wu Yongming sent a signal in a letter to all employees: Alibaba will resolutely implement the rejuvenation of the team. Within 4 years, the post-85s and post-90s generation will be the main managers to refresh the business management team and create more young Alibaba people. The mechanism and cultural environment that have become Ali’s core strength.”
Returning to this local life group, the baton has come to the hands of the "young people".
In this round of organizational adjustment planning, the chairman of Ele.me will be taken over by Wu Zeming, cto of local life group, and Han Liu, the head of Hummingbird distribution, as CEO; the chairman of AutoNavi will be replaced by President Liu Zhenfei, and the CEO will be taken over by AutoNavi coo Guo Ning.
Specifically, Wu Zeming is one of Alibaba’s post-80s partners. He joined Taobao in 2004 and is a core member of the technical architecture of Alibaba's e-commerce system. He has successively served as president of the new retail technology business group, chief technology officer of local life business, chief technology officer of Alibaba Group, and vice president of Alibaba DAMO Academy. Before taking up his new position, Wu Zeming was CTO of Alibaba Group, CTO of Taotian Group and CTO of Local Lifestyle Group.
Han Liu was born in 1988. He is one of the post-85s presidents of Alibaba. After joining Alibaba, he served as senior vice president of Ele.me, head of instant retail business, and president of Hummingbird Instant Delivery.
Putting aside the perspective of letting young people charge into battle, one of Ele.me’s new managers has grown up from a front-line technical position at Alibaba, and the other has real-time retail and e-commerce experience. For the new Ele.me, they only need to go all out to find growth. Integrate with business.
Judging from Ele.me’s internal position, although Ele.me is not yet profitable, Alibaba’s management has repeatedly emphasized that Ele.me is an important asset of Alibaba in the “near field” and occupies an important strategic position.
said this because real-time retail is a rare market in the entire Internet that is still growing at a high compound rate.
According to the "Instant Retail Industry Development Report" released by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, the market size will reach 504.286 billion yuan in 2022; it is expected that in 2026, the number of instant delivery orders will exceed 100 billion, and the scale of instant delivery will reach one trillion Yuan. The growth of
is attracting the entry of various giants, and Ele.me must also seize it. Wu Yongming once proposed that in the future, Alibaba will continue to firmly invest in location-based technology services and continue to focus on the two business positions of local life, namely, using Amap as the main body to develop travel and destination technology services, and Ele.me as the main body. The main body develops technology services that can be delivered to your home immediately.
After the adjustment, Ele.me has technology on one hand and supply chain on the other. It is bound to have huge potential.
The managers of AutoNavi, Liu Zhenfei and Guo Ning, are both born in the 1970s. They were the first and second business positions of AutoNavi before and have many years of front-line combat experience. The obvious change in
is that the two major businesses of AutoNavi and Ele.me, which were previously coordinated by Yu Yongfu, now have separate chairman of the board. can foresee that in the future, both Ele.me and Amap will target their own operating efficiency and quality, and ultimately form the two legs of Alibaba's local life.
As Yu Yongfu wrote in his resignation letter, "Today, the business status and class committee capabilities of AutoNavi and Ele.me allow me to let go with confidence." The new management team is more motivated, but there are many hurdles to overcome.
3. There are still many hurdles to overcome in Ali’s local life
Looking back at Yu Yongfu’s first internal letter after taking office, he described local life as “a not fierce but cruel competition” and emphasized internally: “The process When bidding against each other, the result depends only on yourself."
In 2018, then Alibaba CEO Zhang Yong publicly stated that the local life service market is very important and Alibaba will do its best to win this battle. The subsequent appearances of Ele.me, Alipay, and AutoNavi confirmed Ali’s determination. However, local life is precisely one of Ali’s most difficult businesses.
In the local life battlefield, Ali invested a lot of energy and encountered many difficulties. Especially now, it is difficult to find growth in other sectors of the Internet industry, and the cake of local life is even more attractive.
Picture source Alibaba official website
iResearch data shows that the scale of the local lifestyle market is expected to grow to 35.3 trillion yuan in 2025, but the online penetration rate of local lifestyle in 2021 is only 12.7%.
There is no doubt that this is an enviable gold mine, closely watched by players from all walks of life. There are not only old players like Meituan, but also cross-border players such as Douyin, Kuaishou, and Xiaohongshu. Surrounded by a pack of wolves, the problem facing Alibaba is even more serious.
Although the growth of Ele.me and Amap in the latest financial quarter has brought growth and narrowed losses to local life, other players in the industry have not performed poorly.
In contrast, in the third quarter of 2023, Meituan’s revenue growth reached 22.1%, while the growth of another player, Douyin, has grown by leaps and bounds. Official data from Douyin shows that in 2023, the total transaction volume of the Douyin Life Service Platform increased by 256%, and its stores covered a total of 370+ cities. Compared with last year, the platform's short video transaction volume increased by 83%, and the platform's live broadcast transaction volume increased by 5.7 times. In addition, according to Haitong International Research Report, Douyin’s local life gtv (total transaction volume) has accounted for approximately one-third of Meituan in 2023, approaching 200 billion yuan.
In other words, Alibaba’s local life business prospects still face fierce competition. This adjustment of Ali’s local life also indicates that he will not give up this battlefield.
breaks down the future. Alibaba still has three hard-core hurdles to pass in local life: profitability, growth, and business integration.
As we all know, local life is a money-burning business. From front-end prices and searches to back-end distribution and supply chains, they all require real money to build. However, Alibaba’s local life is still in the red, which will inevitably put the team in trouble. In the dilemma, how to achieve profitability as soon as possible is crucial.
Secondly, when competitors are growing and their market share is limited, AutoNavi and Ele.me have many competitors on the track, and each must find business growth points to grab a bigger piece of the cake.
For example, how does AutoNavi, which has over 700 million monthly active users, continue to grow its taxi-hailing business in the face of competitors such as Didi and Meituan? How does its in-store business cultivate users' minds and improve GMV.
Ele.me's order volume is growing. How can it attract more consumers and merchants in its home-delivery business and build a richer supply and demand side, bypassing Meituan and Douyin? How can the Hummingbird distribution system improve distribution efficiency through gridding? Use scale to reduce costs.
More importantly, after internal collaboration, as an important growth engine of Alibaba’s local life, how Amap’s in-store business cooperates with Ele.me’s home business is also a test for the entire team.
In Yu Yongfu’s vision, AutoNavi, which has 130 million daily active users, will be the entrance to the in-store business, use its traffic advantage to enhance the monetization capabilities of destination services, and gradually increase and extend the carrying capacity and coverage of local life business on the map. Spend. One vertical and one horizontal, achieving two-way expansion of profits and scale. In addition, Ele.me provides instant home delivery services, and the two complete the two-way drive of "home + destination" in Alibaba's local life.
As far as Alibaba’s local life business is concerned, it is possible to win this battle by maximizing the synergy between AutoNavi’s destination and Ele.me’s home business. On the contrary, if the two are always divided, the business will be very difficult. It is difficult to break through the encirclement in a fierce battle.
What is certain is that local life remains a fiercely competitive battleground. Whether it is home, store, or OTA, if they want to break through, Amap and Ele.me cannot let down their guard.
Embracing change has been Alibaba’s key word in the past year. Between the old and the new, Alibaba’s local life business is about to usher in a new stage. However, the time left to the new management to prove themselves is also very tight, and they need to prove themselves as soon as possible.
(The header image of this article comes from Alibaba’s official website.)
