Business
Chinese E-Commerce Giant Alibaba To Split Into Six Units Amid Beijing's Tech Crackdown
Alibaba Logo
Amid China's crackdown on tech giants in the country, Chinese e-commerce giant Alibaba is set to split into six business units in a radical restructure.
The company plans to appoint a separate chief executive and board for each unit, which may result in some mini 'Alibabas' pursuing individual public listings.
Alibaba's announcement came a day after Jack Ma's rare public appearance in mainland China, which Beijing reportedly believes would boost investor confidence that the Chinese authorities have healed ties with the private sector.
Amidst stiff competition in China's e-commerce landscape, Alibaba faced challenges including a $2.8bn regulatory fine and sluggish economic growth, in the past two years.
Alibaba's restructuring plan was shared with Chinese regulators beforehand, and feedback was positive, Financial Times reported citing people aware of the matter.
Alibaba plans to become a holding company, claiming it will enhance market competitiveness and unlock shareholder value.
Alibaba's stocks have plummeted by over 70 per cent following Jack Ma's criticism of China's financial watchdog and banks in his 2020 speech.
This led to a crackdown on the nation's biggest tech companies, including the suspension of Ant Group's IPO, which is Alibaba's fintech subsidiary.
Under the restructuring, Alibaba will create six business groups that each will be dedicated to cloud computing, ecommerce, local services, logistics, digital commerce, and media.
Alibaba CEO Daniel Zhang in a letter to employees said that the six business groups "can pursue independent fundraising and IPOs" when they are prepared.
Zhang will continue as CEO and chair of Alibaba holding group, leading its cloud business.
Taobao and Tmall, Alibaba's main money making businesses, will remain wholly owned by the company.
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