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Alibaba Forms Six Business Units, Shifts to Holding Company

by News Desk

After years of pursuing a grow-big-and-dominate approach, Alibaba is now trying divide and conquer. 

The Chinese e-commerce giant, which faces a delicate balancing act between its corporate impulses and its regulators in Beijing, said it will form six business units under the Alibaba umbrella. 

Daniel Zhang will continue to lead the overall company as chairman and chief executive officer, but each unit will have its own CEO and board of directors. 

“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” Zhang said in an email to employees.

The business units include the company’s massive Chinese e-commerce business dubbed Taobao Tmall Commerce Group; the Global Digital Commerce Group; the Cloud Intelligence Group; the Local Services Group; Cainiao Smart Logistics and the Digital Media and Entertainment Group. 

“This transformation will empower all our businesses to become more agile, enhance decision-making and enable faster responses to market changes,” Zhang told employees. 

It’s the biggest corporate update in Alibaba’s 24-year history and comes just as the company’s founder, Jack Ma, was reported to have resurfaced in China after quietly spending time abroad. 

Alibaba was founded with 18 people in Ma’s apartment in 1999. He was the big personality behind the company’s outsized growth, but stepped aside in 2019 and a year later gave a speech that was critical of financial regulators and ultimately cost him what would have been a record breaking $37 billion IPO for the fintech giant Ant.

Since then, the Chinese government has reasserted stricter controls on businesses in the country.

Alibaba went public in New York in 2014 and has proved to be a potent force — a super app that combines services similar to Amazon, Netflix, UPS and more — but with size comes complexity, and Wall Street investors seemed keen to get a closer look at the company’s individual parts. 

Shares of Alibaba rose 14.8 percent to $98.88 in midday trading on Tuesday.

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