Alibaba Group Holding is merging its food delivery platform Ele.me and online travel agency Fliggy into its core e-commerce business, as the Chinese tech giant seeks to streamline operations and sharpen its focus on artificial intelligence (AI). The restructuring “marks a strategic upgrade from an e-commerce platform to a comprehensive consumer platform”, Alibaba CEO Eddie Wu Yongming wrote in a letter to employees on Monday. “Moving forward, we will increasingly optimise our business models and organisational structures from the user’s perspective to create richer, higher-quality consumer experiences.” Alibaba, the business conglomerate founded by billionaire Jack Ma, owns the South China Morning Post. Following the changes, Ele.me CEO Fan Yu and Fliggy CEO Zhuang Zhuoran will report directly to Jiang Fan, who leads Alibaba’s E-commerce Business Group. That division oversees domestic platforms Tmall and Taobao, as well as the company’s international e-commerce operations. The move was designed to drive synergies across Alibaba’s consumer-facing businesses – “sharing unified objectives and fighting as one”, Wu said – reinforcing the e-commerce group’s role as the company’s main profit engine. Ele.me was previously grouped with Alibaba’s mapping service Amap under the Local Services Group, while Fliggy had operated independently. “Ele.me’s merger clearly aims to bridge the gap between instant delivery services for retail goods and food, integrating resources to better compete in the broader instant retail market,” said Hu Yugui, an analyst at Dolphin Research, a secondary market research brand under Longbridge. He added that the synergies from Fliggy’s merger are less clear, requiring a “wait-and-see” approach. Hu noted that escalating competition in instant commerce continues to blur the boundaries between online retail and service platforms. “E-commerce, instant retail, travel and hospitality, as well as offline-to-store businesses, will increasingly merge,” he said. The move also aligns with Alibaba’s recent efforts to refocus resources on its main revenue drivers, which include cloud computing. AI has recently been a top priority at the company amid intensifying competition in China. Alibaba’s push for ecosystem synergy is already showing results, as its recent foray into instant commerce – also known as flash shopping, or shangou in Chinese – intensifies competition in the country’s on-demand delivery sector against rivals JD.com and market leader Meituan. Launched on Taobao in late April, the service offers rapid delivery of a wide range of products, from food and electronics to clothing and flowers, all fulfilled by Ele.me. Daily orders reached 10 million within the first week. The company announced on Monday that daily orders have reached 60 million. Meituan’s daily orders reportedly reached 90 million in recent days, while JD.com’s service hit 25 million daily orders earlier this month. The latest moves underscore Alibaba’s efforts to break down internal silos and foster greater collaboration across business units. In an internal letter to staff in May, CEO Eddie Wu said the company would “mobilise at full strength and concentrate our efforts on a few core strategic priorities”, with “key initiatives driven jointly by multiple businesses”. Alibaba shares fell 1.5 per cent on Monday morning in Hong Kong.