Alibaba Group (NYSE:BABA) Holding Ltd has announced plans to split its business into six separate units, covering e-commerce, media, and cloud operations, marking the most significant overhaul of the Chinese e-commerce giant since its founding in the late 90s.
The shake-up is expected to pave the way for future spinoffs and individual IPOs of the six separate units:
- 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 announcement shows that Alibaba is ready to test the public markets following paramount leader Xi Jinping’s crackdown on Chinese tech companies in recent years on fears of reduced party control of the one-party state.
It also coincides with Alibaba co-founder Jack Ma’s return to the Chinese public sphere after a year abroad.
Ma, one of China’s most successful entrepreneurs, caused international speculation after disappearing from the public eye in 2020, with some theorising that he was ruffling the feathers of China’s autocratic regime.
“At 24 years of age, Alibaba is welcoming a new opportunity for growth,” Zhang said in a statement regarding the shake-up.
“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready.”