Alibaba Restructures Local Consumer Business To Combat Meituan And Douyin Rivalry

Alibaba Group Holding Limited BABA consolidated certain operations in its local consumer services segment to cope with increased competition.
Alibaba looked to merge its Koubei restaurant review feature into the Amap app, which provides a mobile digital map, navigation, real-time traffic information, and a ride-hailing aggregator, SCMP reports.
Koubei head Zhang Liang will report directly to Amap CEO Liu Zhenfei instead of local consumer services group head Yu Yongfu.
Alibaba's local consumer services business segment includes food delivery unit Ele.me, online-to-offline integration service solution provider Taoxianda, Amap, and online travel platform Fliggy.
The reorganization marked Alibaba's attempt to stay relevant in the country's on-demand local services industry, dominated by Meituan MPNGF MPNGY and ByteDance Ltd-owned Douyin.
China's on-demand local services sector will likely be worth more than 35 trillion yuan ($5.1 trillion) by 2025. Besides food and grocery deliveries, on-demand local services enable online consumers to connect with offline merchants from various fields.
In 2022, Alibaba's local consumer services revenue increased by 21% in the September quarter to 13.07 billion yuan, driven by strong order growth at its Amap business.
Alibaba's local consumer services segment also narrowed its losses in Q3 to 3.49 billion yuan, from 6.53 billion yuan the previous year, on the back of improving business operations at Ele.me.
Price Action: BABA shares closed lower by 4.91% at $95.10 on Tuesday.

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