Alibaba Group plans to split into six units, the company said Reuters. Entities will seek fundraisers and market listings as China eases its crackdown on private business.
The major restructuring will see the company split into six organizations: Cloud Intelligence Group (cloud solutions), Taobao Tmall Commerce Group (local online commerce services), Local Services Group (delivery services), Cainiao Smart Logistics Group (logistics), Global Digital Commerce Group (AliExpress) and Digital Media and Entertainment Group (games, movies and web services).
Jack Ma, co-founder of Alibaba Group
The announcement comes a day after Jack Ma returned to China, a move that is seen as an indication of Beijing’s softer approach to private businesses. Alibaba has come under close scrutiny over the past couple of years after being a target of regulators.
In a letter to staff, Chief Executive Daniel Zhang said the intention is to make the organization “more agile, shorten decision links and respond faster.” He will continue as chairman and chief executive officer of Alibaba Group, which will take on a new role as the holding’s management model.
Alibaba Group Headquarters
Each of the six firms will have a chief executive officer and board of directors with the ability to raise capital outside the umbrella company. An exception will be Taobao Tmall Commerce Group, which will be wholly owned by Alibaba Group.
Analysts see the restructuring as a step to soften the approach to US regulators and international investors. Jack Ma’s return to China, just days after Li Qiang was appointed premier of China, could be a way to boost business confidence among local entrepreneurs that China’s technological crackdown is ending.
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