HomeIndustriesAlibaba Announces Split in 6 Units, Its U.S. Listed Stocks Rise

Alibaba Announces Split in 6 Units, Its U.S. Listed Stocks Rise

Chinese e-commerce giant Alibaba announced on Tuesday that it would be splitting into six separate units. As a result of restructuring, the company will now consist of the following business group—Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group, and Digital Media and Entertainment Group.

This is the biggest restructuring in Alibaba’s history and follows China’s decision to encourage the growth of the country’s private sector. According to the company’s Chief Executive Daniel Zhang, the split will allow Alibaba to run more efficiently and adapt better to market changes.

“The original intention and fundamental purpose of this reform isto make our organisation more agile, shorten decision making links and respond faster,” Zhang said in a letter to staff, according to Reuters.

Each unit will have its own CEO as well as a board of directors. The intention is to keep them flexible in pursuing independent fundraising while laying out the foundation to explore an initial public offering (IPO). Only the Taobao Tmall Commerce Group, which will oversee online shopping platforms Taobao and Tmall, will remain fully owned by the company.

Shortly after the split was announced, the U.S.-listed Alibaba stock saw a moderate jump. The shares were 13.11 percent up at one point on Wednesday, trading at $97.41 per share. The stock is close to six percent up year-to-date.

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