Alibaba Group has announced the formation of six separate business units, each with its own CEO and board of directors. The units will be able to raise funds on their own and go public. This move comes as the tech industry faces increased competition and regulation.
Cloud intelligence, global digital commerce, domestic e-commerce, local services such as delivery and logistics, and entertainment/media are the six independent units. Taobao and Tmall, Alibaba Group’s domestic e-commerce marketplaces that account for more than two-thirds of total revenue, will remain wholly owned. The remaining units will be free to pursue fundraising and listing opportunities.
Alibaba’s overseas e-commerce marketplaces, such as Lazada and AliExpress, are part of the Global Digital Commerce Group. They face fierce domestic competition and account for only 8% of Alibaba’s total sales. Aliyun, Alibaba’s cloud computing unit, and DAMO Academy, Alibaba’s research arm for chips and artificial intelligence, are both part of the Cloud Intelligence Group.
Food and grocery delivery services such as Ele.me are part of the Local Services Group, as is Amap, Alibaba’s mapping app. Cainiao Smart Logistics is now a major Chinese logistics provider, serving both Alibaba and third-party customers. Youku, Alibaba’s YouTube-like streaming video site, and Alibaba Pictures, its film production unit, are both housed in the Digital Media and Entertainment Group.
Alibaba CEO Daniel Zhang said that the business units will each be free to pursue funding and IPOs independently, pointing to a possible carving out in the future.
The sources for this piece include an article in Axios.