Alibaba makes a break for it. Company announces plans to split into 6 units

HANGZHOU, China — Global e-commerce platform Alibaba announced plans to split into six business groups, each with its own governance, to “unlock greater value.”

In a March 3 letter to employees, Alibaba Group Chairman and CEO Daniel Zhang announced the changes, which were approved by partners and the board of directors. A key element of the move is the establishment of a board of directors and CEO for each business group, while Alibaba Group will move toward the management model of a holding company.

Zhang said in the letter that each business group and company must actively face the rapid changes in the market and the changes in technology, form their own development strategies, make quick decisions, strive for progress, be brave in innovation and face the test of the market. “The market is the best touchstone, in the future, qualified business groups and companies will have the possibility of independent financing and listing,” Zhang wrote.

According to the plan, under Alibaba Group, six major business groups and other companies will be established, including Alibaba Cloud Intelligence, Taobao Tmall Business, International Digital Business, Local Life, Cainiao and Dawen Entertainment, and other companies will also be independently operated and managed accordingly.

In the reorganization, Zhang will remain chairman and CEO of Alibaba Group and CEO of Alibaba Cloud Intelligence Group. Dai Shan is the CEO of Taobao Tmall Business Group; Yu Yongfu is the CEO of Local Life Group; Wan Lin continues to serve as CEO of Cainiao Group; Jiang Fan is the CEO of Overseas Digital Business Group; and Fan Luyuan is the CEO of Dawen Entertainment Group.

CNBC reports that each unit can pursue independent fundraising and a public listing, except for Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.

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