by Josh Horwitz
(Reuters) – Alibaba Group plans to split its business into six main units, ranging from e-commerce to cloud computing, in its biggest restructuring in its 24-year history, and five of them will consider levies funds or IPOs.
The six units are Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media and Entertainment Group, the group said in a statement.
Daniel Zhang will remain chairman and CEO of Alibaba Group, which will follow the management model of a holding company, and simultaneously serve as CEO of Cloud Intelligence Group.
“The original intent and fundamental goal of this redesign is to make our organization more agile, shorten decision-making ties and respond more quickly,” said the Daniel Zhang in a letter to staff and viewed by Reuters.
Each entity will retain the ability to raise funds and seek IPOs, with the exception of Taobao Tmall Commerce Group, which runs its commerce business in China and will remain a wholly-owned unit of Alibaba Group.
The announcement comes a day after Alibaba founder Jack Ma was spotted at an elementary school in Hangzhou, marking his first public appearance in mainland China in more than a year.
“It seems like a coincidence that this is happening just when Ma seems comfortable coming back. To me, this suggests that Alibaba has wanted to do something for a while, but has been waiting for the opportunity to do so. “said Stuart Cole, chief macroeconomist at Equiti Capital.
(Reporting Josh Horwitz in Shanghai, Lavanya Ahire and Tiyashi Datta in Bengaluru; Nathan Vifflin, editing by Kate Entringer)
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