Alibaba Group to split into six groups in structure shake-up

Alibaba Group is to split into six business groups as part of the company’s largest restructuring in its 24-year history.

In a letter to employees, Alibaba’s chief executive Daniel Zhang said that the shake-up is designed to make the Chinese tech giant more agile and will enable faster responses to changes in the market. He added that it would unlock shareholder value and foster market competitiveness.

The business will be divided into the following groups: Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group along with Digital Media and Entertainment Group.

Each group will have its own chief executive, who will report to a board of directors and take on full responsibility for the company’s performance. Alibaba will retain control of Taobao Tmall Commerce Group while the other groups will have the opportunity to raise outside capital and seek an initial public offering.

Zhang said: “This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes,” wrote Zhang. “The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready.”

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