HONG KONG (Bernama-UPI): Worldwide retailer and e-commerce company Alibaba announced on Tuesday (March 28) that it will be splitting its business into six distinct entities.
The six entities will have their own CEOs and boards of directors, reported UPI.
Business groups and business companies will set up boards of directors, respectively, and implement the CEO responsibility system under the leadership of the board of directors of each business group and business company, while Alibaba Group will move towards the management model of a holding company in an all-round way, Alibaba said in a statement on Tuesday.
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Out of the six new entities, five will also have the flexibility to raise outside capital and potentially to seek its own IPO, said Alibaba.
This transformation will empower all our business to become more agile, enhance decision-making, and enable faster responses to market changes, said Alibaba CEO Daniel Zhang in the statement.
In 2020, Alibaba's financial technology organisation, Ant Group, was forced to withdraw a US$37 billion initial public offering on the Hong Kong and Shanghai stock markets after the intervention of Chinese regulators.
In 2021, Alibaba was fined US$2.8 billion by China's antitrust regulators.
Tuesday's announcement caused a 9 per cent increase in Alibaba stock value in pre-market trading in the US markets.
The Taobao Small Commerce Group will include the Taobao and Tmall online outlets.
The Cloud Intelligence Group will be led by current Alibaba CEO Daniel Zhang.
The Local Services Group will be led by You Yongfu, and will be in charge of food delivery under Alibaba
The Global Digital Commerce Group will be led by Jiang Fan and will handle Alibaba's international sales businesses.
Cainiao Smart Logistics currently operates as a separate entity, handing logistics for Alibaba, under CEO Wan Lin.
The Digital Media and Entertainment Group will be led by Fan Luyuan and will handle Alibaba's streaming services.
