The Chinese e-commerce and cloud computing giant Alibaba has announced that it plans to sell assets and relinquish control of certain activities. The tech giant has embarked on a major restructuring where it is planned to split its activities into six units.
In detail, the six entities will be as follows:
- Cloud Intelligence Group for the cloud
- Taobao Tmall Commerce Group for e-commerce in China
- Global Digital Commerce Group for international online sales
- Cainiao Smart Logistics for logistics
- Local Services Group for on-demand services such as home delivery
- Digital Media and Entertainment Group for media and entertainment
Note that Taobao and Tmall which will remain 100% under the control of Alibaba.
“Alibaba will be more of an asset and capital manager than a commercial operator”
“Alibaba will be more of an asset and capital manager than a business operator,” group CEO Daniel Zhang said, according to Reuters. Chief Financial Officer Toby Xu said each new entity could independently decide whether to raise funds and commit to an IPO “when ready”. Alibaba will still remain in control of each entity after they go public. At the same time, the group plans to sell non-strategic assets to optimize its capital structure, said the chief financial officer.
Alibaba’s valuation reached more than $800 billion before falling back to $260 billion after the Chinese authorities launched a regulatory offensive at the end of 2020. These announcements are made the day after Jack Ma’s return to China.