Alibaba to split into six business units and explore fundraising

Alibaba Group Holding announced it plans to split its business into six main units under new CEOs and each of the units will explore fundraising or initial public offerings.
Alibaba.com e-commerce salesDaniel 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.

The move marks the most significant governance overhaul in the platform company’s 24-year history and better positions Alibaba’s businesses to become more agile to better capture market opportunities and stimulate growth.

“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” said Daniel Zhang in a letter to employees.

The six business groups will be:

#1 Cloud Intelligence Group

#2 Taobao Tmall Commerce Group

#3 Local Services Group

#4 Cainiao Smart Logistics

#5 Global Digital Commerce Group

#6 Digital Media and Entertainment Group

Daniel Zhang will also serve as the CEO of the Cloud Intelligence Group. 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 include 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.

Taobao Tmall Commerce Group will remain an Alibaba Group wholly owned unit.

Alibaba will slim down middle and back office functions at the group level while only functions required for listed company compliance will be retained. The middle and back office capabilities the group has built over the years will transition into the relevant business groups and companies.

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