Alibaba To Split Itself Into Six Smaller Companies To Respond Efficiently To Market Fluctuations

Alibaba is dividing itself into six business divisions in an effort to become more agile in responding to market changes and increasing the value of those units.

Alibaba Group Holding Ltd. shares soared 8% at the opening bell.

The Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics, and Digital Media and Entertainment Group are the six new groups announced by Alibaba Group Holding Ltd. in a regulatory filing on Tuesday.

Except for Taobao Tmall Business Group, which will remain completely owned by Alibaba Group, each group will be free to attract outside cash and potentially pursue its own initial public offering, according to the firm. Each group will be handled separately by its own CEO and board of directors.

Cloud, AI, and DingTalk are all part of the Cloud Intelligence Group. Taobao, Tmall, Taocaicai, and 1688.com are all part of the Taobao Tmall Business Group.

Amap and Ele.me are part of the Local Services Group, whereas Lazada, AliExpress, Trendyol, Daraz, and Alibaba.com are part of the Global Digital Business Group. Youku and Alibaba Pictures are part of the Digital Media and Entertainment Group.

Except for Taobao Tmall Business Group, which will remain completely owned by Alibaba Group, each group will be free to attract outside cash and potentially pursue its own initial public offering, according to the firm. Each group will be handled separately by its own CEO and board of directors.

Cloud, AI, and DingTalk are all part of the Cloud Intelligence Group. Taobao, Tmall, Taocaicai, and 1688.com are all part of the Taobao Tmall Business Group.

Amap and Ele.me are part of the Local Services Group, whereas Lazada, AliExpress, Trendyol, Daraz, and Alibaba.com are part of the Global Digital Business Group. Youku and Alibaba Pictures are part of the Digital Media and Entertainment Group.

With regulatory crackdowns on technology, education, online gambling, and financial firms, as well as stringent Covid-19 limitations, the Chinese government has been attempting to restore confidence in the private sector.

Ma stepped down as chairman of Alibaba in 2019, claiming he wanted to focus on philanthropy. In January, he relinquished control of Ant, the financial technology business, as part of a restructuring of its shareholder structure.