Alibaba announced plans to split its business into six separate units on Tuesday, a move that promises to radically reshape the sprawling Chinese e-commerce firm founded by Jack Ma nearly 25 years ago.
The company revealed that each new business unit will be led by its own CEO and board of directors. According to a company statement issued on Tuesday, five of the new business groups “will also have the flexibility to raise outside capital and potentially seek its own IPO.”
One day after Ma made a rare public appearance in China, one of the country’s most recognizable companies underwent a significant restructuring.
Ant Group, a financial affiliate of Alibaba also founded by Ma, was forced to pull its $37 billion IPO at the last minute in November 2020, following a speech from Ma in which he criticized China’s banks and financial regulators. The year after, Alibaba was slammed with a fine from China’s antitrust.
Alibaba lost roughly 75% of its market value between its peak in October 2020 and the same month two years later, as its shares experienced a sharp decline during that time. However, attitudes have changed this year. Ant Group was successful in obtaining crucial approval for the capital expansion of its consumer finance division, and China has generally taken a more pro-business stance.
Ma was seen with students and teachers at the Alibaba-funded Yungu School on Monday in Hangzhou, where he visited and “discussed the future of education with the campus directors,” per a post from the school on WeChat. He stepped down as CEO of Alibaba in 2013 and his role as executive chairman in 2019.
With the reorganization, Alibaba seems to be following the lead of US tech giants like Google, which changed its name to Alphabet. Alibaba claims that the objective is to create more agile businesses that can ultimately unlock more value for investors.
“This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes,” Daniel Zhang, CEO and chairman of Alibaba Group, said in an email to employees.
A Cloud Intelligence Group, a Taobao Tmall Commerce Group, a Local Services Group, a Cainiao Smart Logistics, a Global Digital Commerce Group, and a Digital Media and Entertainment Group will be the six newly created business units.
This article was originally published by Al Mayadeen English.
