Sunday, March 03, 2024
Outlook.com
Outlook India
Outlook Business

Alibaba Group Announces Structural Overhaul, Splits Business Into Six Entities

Each newly created entity will be responsible for its performance and able to pursue initial public offerings when ready

Alibaba Group Announces Structural Overhaul, Splits Business Into Six Entities
Jack Ma, founder, Alibaba Group
POSTED ON March 28, 2023 5:31 PM

Chinese technology giant Alibaba Group Holding Ltd has announced that it will split its business into six independent entities. The move follows a report that chief executive officer (CEO) Daniel Zhang had been delegating more power to the heads of Alibaba's business units, potentially paving the way for spinoffs and independent fundraising. 

The restructuring is aimed at building a more nimble corporate structure and empowering each business unit to become more agile, enhance decision-making and respond faster to market changes.

The six major areas that Alibaba will divide its businesses into are cloud, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics and media and entertainment. Each of these newly created entities will have their own CEOs reporting to their respective boards of directors and will be fully responsible for their performance.

The restructuring will reportedly not affect the listing status of Alibaba's shares in New York and Hong Kong. 

The announcement has come a day after Alibaba co-founder Jack Ma returned to mainland China after almost a year overseas.Ma's return is seen as Beijing's attempt to revive entrepreneurs' confidence following years of regulatory clampdowns and Covid-19 restrictions. 

Alibaba's domestic commerce business will remain a wholly owned unit of the company, while each of the newly created entities will be able to raise funds and pursue initial public offerings when ready, according to Zhang's letter to employees. 

hinese technology giant Alibaba Group Holding Ltd has announced that it will split its business into six independent entities. The move follows a report that chief executive officer (CEO) Daniel Zhang had been delegating more power to the heads of Alibaba's business units, potentially paving the way for spinoffs and independent fundraising. 

The restructuring is aimed at building a more nimble corporate structure and empowering each business unit to become more agile, enhance decision-making and respond faster to market changes.

The six major areas that Alibaba will divide its businesses into are cloud, Chinese e-commerce, global e-commerce, digital mapping and food delivery, logistics and media and entertainment. Each of these newly created entities will have their own CEOs reporting to their respective boards of directors and will be fully responsible for their performance.

The restructuring will reportedly not affect the listing status of Alibaba's shares in New York and Hong Kong. 

The announcement has come a day after Alibaba co-founder Jack Ma returned to mainland China after almost a year overseas.Ma's return is seen as Beijing's attempt to revive entrepreneurs' confidence following years of regulatory clampdowns and Covid-19 restrictions. 

Alibaba's domestic commerce business will remain a wholly owned unit of the company, while each of the newly created entities will be able to raise funds and pursue initial public offerings when ready, according to Zhang's letter to employees. 

  • Related Articles

    It owned a total of 6.26 per cent shareholding in the company. In January, the Chinese multinational sold a 3.1 per cent stake

    Alibaba Sells Stake In Paytm, Makes An Exit From India: Report

    The Chinese e-commerce giant Alibaba joins technology firms including Alphabet and Baidu to compete to OpenAI and Microsoft’s ChatGPT AI chatbot

    Alibaba Shares Jump As It Announces Testing Of ChatGPT rival: Report

    The development follows Alibaba's stake sale in BigBasket and Zomato

    Alibaba Sells Nearly Half Of Its Direct Stake In Paytm