BENGALURU: Chinese ecommerce giant Alibaba will split its $220 billion business into six different units, and each new unit could pursue an initial public offering (IPO). This announcement comes just a day after founder Jack Ma made his public appearance in China after a year.
This move is designed to unlock shareholder value and foster market competitiveness. The six units encompass Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group and Digital Media and Entertainment Group.
A few weeks ago, Alibaba released a survey report that said four in five businesses in Asia are planning a full cloud migration by 2024, and that a larger share of businesses in Asia will focus on data analytics and AI, cloud computing and automation. Daniel Zhang will continue to serve as Chairman and CEO of Alibaba Group, which will follow a holding company management model, while each of the six business groups will be managed by 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,” said Zhang in an email to employees. The Hangzhou-headquartered group also expects the move to create greater ownership as each business group and other investments will have tailored incentive plans.
As far as India is concerned, the group slowly exited from India as recently it sold its remaining stake in Paytm. It was holding 3.4 per cent in Paytm. In 2021, it sold its stake in BigBasket. Alipay Singapore, an arm of Alibaba Group, in November last year, sold 3.07 per cent stake in online food delivery platform Zomato for Rs 1,631 crore. Also, this restructuring continues a long-running move towards a nimbler organisational structure.