Alibaba Group plans to split into six divisions, the company told Reuters . As China eases its crackdown on private companies, different entities will seek financing and market listings.
The massive reorganization will split the company into six organizations – Cloud Intelligence Group (cloud solutions), Taobao Tmall Business Group (local e-commerce services), Local Services Group (delivery Cargo Services), Cainiao Intelligent Logistics Group (logistics), Global Digital Commerce Group (AliExpress), and Digital Media and Entertainment Group (games, movies, and web services). Jack Ma, co-founder of Alibaba Group
The news came a day after Ma’s return, a move seen as a sign of Beijing’s softer approach to private companies. Alibaba has been under intense scrutiny over the past two years after becoming a target of regulators.
In a letter to staff, CEO Zhang Yong said the aim was to make the organization “more agile, shorten the decision-making process and respond faster”. He will continue to serve as chairman and chief executive officer of Alibaba Group, which will adopt a new holding company management model.
Alibaba Group HQ
Each of the six businesses has a CEO and board of directors with the ability to raise capital outside the umbrella company. One exception is Taobao Tmall Business Group, which will be wholly owned by Alibaba Group.
Analysts see the restructuring as a step to soften attitudes toward U.S. regulators and international investors. Ma’s return to China, days after Li Qiang was named prime minister, could be a way of boosting business confidence among local entrepreneurs that China’s tech crackdown is ending.