Alibaba splits into six units as part of new restructuring plan

Alibaba is mulling to divide itself into six units that will individually raise funds and explore initial public offerings, the biggest restructuring of the Chinese online commerce leader since its establishment more than two decades ago.

Alibaba said the restructuring would see itself spliting into six units including 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 on the company's conference call 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. 

Toby Xu, CFO of Alibaba Group added that, all business segments and business companies within the company, except Taobao Tmall Commerce Group, can finance and spin-off independently and Alibaba will continue to evaluate the return of shares repurchase plan.

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Zhang issued a letter to the company’s employees, stating that the company will set up corporate entities for other operations following a “1+6+N” structure, with 1 referring to Alibaba Group, "6" referring to the six business units, and "N "referring to Alibaba's future business units. The letter also stated that would continue as chairman and CEO of Alibaba Group, but will hand all operational decisions including hiring, firing, research, profit and losses to the CEOs of the six businesses respectively.

The news came a day after Alibaba founder Jack Ma returned to China from a year-long stay of overseas travel. According to Wall Street Journal, Ma visited Yungu School in Hangzhou on Monday, where his company is headquartered, to discuss the impact and challenges of artificial-intelligence (AI) such as OpenAI’s ChatGPT on education with educators. The photo featuring Ma gathering with educators are being shared on Weibo, a check by MARKETING-INTERACTIVE saw.

MARKETING-INTERACTIVE has reached out to Alibaba Group for further information.

Back in November last year, Alibaba Group’s omnichannel retail chain Freshippo has partnered with Tims China, operator of Canadian coffee chain Tim Hortons in China, to introduce co-branded coffee products for sale exclusively through Freshippo’s online channels and physical stores.

The initial co-branded coffee products, Velvet Cocoa Coffee and Chestnut Latte, will be available for sale in December. Freshippo will sell these products online through its official app and also offline through its over 300 brick-and-mortar stores located in 27 cities across China, according to the release.

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