Alibaba Group are to carve their business up, into six business groups and other investments, a move they say is designed to unlock shareholder value and foster market competitiveness. This move will allow different groups to grow at own pace and trajectory and with any luck should lower the danger of Government oversight and danger of anti-trust violations both domestically in China and overseas. The new groups will be:
- Cloud Intelligence Group
- Taobao Tmall Commerce Group
- Local Services Group
- Cainiao Smart Logistics
- Global Digital Commerce Group
- Digital Media and Entertainment Group
Each group will be free to fund raise and IPO when the market conditions are right, although Taobao Tmall Commerce Group for which Alibaba Group will retain ownership.
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. He will also serve as the CEO of the Cloud Intelligence Group, as previously announced. This group will house all cloud, artificial intelligence activities, and businesses like DingTalk.
Taobao Tmall Commerce Group with be led by Trudy Dai and will include China commerce activities such as digital marketplaces Taobao and Tmall, value-for-money platform Taobao Deals, community marketplace business Taocaicai, wholesale marketplace 1688.com and other businesses.
The Local Services Group will have Yu Yongfu as CEO and embrace navigation platform Amap, delivery service Ele.me and other businesses. Wan Lin will continue as CEO of Cainiao Smart Logistics.
The Global Digital Commerce Group, will be headed by Jiang Fan as CEO and will span international commerce businesses Lazada, AliExpress, Trendyol, Daraz and Alibaba.com. Meanwhile, Fan Luyuan will be CEO of Digital Media and Entertainment Group, inclusive of Youku, Alibaba Pictures and other businesses.
Each business group and other investments will retain the flexibility to raise outside capital and seek an initial public offering. The exception is Taobao Tmall Commerce Group, which will remain an Alibaba Group wholly owned unit.
The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready.
This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes.
At 24 years of age, Alibaba is welcoming a new opportunity for growth.
– Daniel Zhang, Chairman and CEO, Alibaba Group
