Alibaba Splits Into Six Subsidiaries For Market Competitiveness

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By Adedapo Adesanya

The Chinese e-commerce company, Alibaba, has announced plans to split its company into six business groups as part of efforts to raise funding and also push for an initial public offering (IPO).

In an announcement on Tuesday, the Chinese e-commerce giant said that each business group will be managed by its own CEO and board of directors.

Alibaba said in a statement that the move is “designed to unlock shareholder value and foster market competitiveness.”

The move comes after a tough couple of years for Alibaba, which has faced slowing economic growth at home and tougher regulation from China, which fears it was becoming too powerful.

Following this, Alibaba has struggled with growth over the past few quarters and is now looking to reinvigorate growth with the reorganization.

The six business groups include the Cloud Intelligence Group, which Alibaba CEO, Mr Daniel Zhang, will head. It will house the company’s cloud and artificial intelligence activities.

Taobao Tmall Commerce Group cover the company’s online shopping platforms, including Taobao and Tmall while Local Services Group will see Mr Yu Yongfu be its CEO, and the business will cover Alibaba’s food delivery service Ele.me as well as its mapping.

Cainiao Smart Logistics will be headed by Mr Wan Lin, who will continue as CEO of the business which houses Alibaba’s logistics service.

Global Digital Commerce Group will be led by Mr Jiang Fan as CEO. This unit includes Alibaba’s international e-commerce businesses, including AliExpress and Lazada.

Digital Media and Entertainment Group are entrusted to Mr Fan Luyuan as CEO. The unit includes Alibaba’s streaming and movie business.

Each of these units can pursue independent fundraising and a public listing when they’re ready, the company said.

The exception is the Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.

Alibaba’s fintech affiliate Ant Group was forced by regulators to cancel its mega-public listing in November 2020. And in 2021, Alibaba was fined $2.6 billion as part of an antitrust probe.

The reorganisation also comes at a time when there are signs that China is seeking to revive economic growth in the world’s second-largest economy after it replaced anti-COVID curbs.

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