Alibaba to Restructure into Separate Business Units

Chinese e-commerce giant Alibaba said it will reorganize into six distinct units, five of which will be able to raise outside capital and seek their own IPOs, according to a company statement. Each division will have its own chief executive and board of directors.

The restructuring aims to enhance flexibility, which can open up 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,” said Daniel Zhang, Chief Executive Officer and Chairman of Alibaba Group, in an email to employees.

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The six newly formed business units will be: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and a Digital Media and Entertainment Group.

The announcement came a day after its billionaire founder Jack Ma made a rare public appearance in China as the government indicated that it might tamp down regulatory pressure on the internet industry, CNN reported. The outspoken Ma has been relatively quiet during the two years since the country began its crackdown on the tech sector. He has previously criticized China’s banks and financial regulators, leading to his companies sustaining fines following his remarks.

But in 2022, as sentiments appeared to have shifted, Ma’s company Ant Group won approval for the expansion of its consumer finance unit. China, CNN reported, has adopted a more business-friendly stance.

Ma stepped down from his role at Alibaba in 2013 and retired from his executive chairman role in 2019.