Alibaba's eCommerce unit reportedly eyes a U.S. IPO

Alibaba’s global online shopping unit is reportedly looking into a US initial public offering (IPO) as it looks to further its growth for eCommerce brands including major Lazada and AliExpress.  

According to Bloomberg, the eCommerce giant is in early stages of discussion and the size and timeline of the IPO has yet to be determined. The business group is in negotiation with banks that might assist with planning for the IPO next year.

Alibaba's U.S.-listed shares increased as much as 5% during the pre-market trading in New York. One of the six distinct divisions that Alibaba split into as part of a push to restructure the vast company is the online shopping segment, is a rival to Amazon outside of China.

MARKETING-INTERACTIVE has reached out to Alibaba for a statement. 

Don't miss: Alibaba splits into six units as part of new restructuring plan

Back in March, Alibaba unveiled a new organisational and governance structure, including dividing itself into six units that will individually raise funds and explore initial public offerings. This aims to empower all its businesses to become more agile, enhance decision making, enable faster responses to market changes, and promote innovation to capture opportunities in their respective markets and industries, thereby unlocking the value of Alibaba Group’s various businesses.

The six units include Cloud Intelligence Group(阿里雲智能), Taobao Tmall Commerce Group (淘寶天貓商業), Local Services Group(本地生活), Cainiao Smart Logistics Group(菜鳥), Global Digital Commerce Group (國際數字商業) and Digital Media and Entertainment Group (大文娛). The business units will separately set up their own boards of directors. Each of the them will have to seek possibility of their own fundraising avenues through initial public offerings (IPOs).

Daniel Zhang, CEO of Alibaba Group, said in a press conference that, after the restructuring, each business segment will become an independently operating company. Each of them will have its own investment and finance department, corporate management structure, as well as its own board of directors. He believed that the restructuring will allow all businesses to respond to market changes and market competition more quickly, as well as further enhance Alibaba's value and benefit its stakeholders.

During the press conference for the company's financial report in 2022, Zhang mentioned that the business of Lazada continued to optimise for order volume growth, reducing loss per order by more than 30% year-on-year. He stated that he is firmly committed to continuing to invest in Lazada’s region of Southeast Asia.

Working closely with logistic company Cainiao, AliExpress significantly improved time-bound order deliveries on important routes. The amount of orders placed through AliExpress is beginning to increase as the quality of logistical services and the effects of V.A.T. and fluctuating currency exchange rates in France and Spain both continued to improve.

Through a combination of localised retail and cross-border trade, the company's globalisation strategy will continue to be firmly focused on Southeast Asia and Europe in the future. If Alibaba moves forward with the IPO, the division would join other well-known Chinese companies, such as the clothing manufacturer Shein.

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