Alibaba’s Shares Pop After E-Commerce Giant Reveals Breakup Plan
Dou Shicong
DATE:  Mar 29 2023
/ SOURCE:  Yicai
Alibaba’s Shares Pop After E-Commerce Giant Reveals Breakup Plan Alibaba’s Shares Pop After E-Commerce Giant Reveals Breakup Plan

(Yicai Global) March 29 -- Shares of Alibaba Group Holding surged after the Chinese online retailer said it will break itself into six business groups to deal with the rapidly changing market environment.

Alibaba [HKG: 9988] closed up 12.2 percent at HKD94.55 (USD12.04) a share in Hong Kong today. Its New York-listed stock [NYSE: BABA] ended 14.3 percent higher at USD98.40 yesterday.

Under the restructuring, the new business groups -- Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group -- will independently raise funds and go public when the time is right, the Hangzhou-based firm said yesterday. Each will be managed by its own chief executive and board of directors, it added.

The revamp is Alibaba's most important organizational change since it was founded 24 years ago, “so as to better face market competition,” Chairman and Chief Executive Daniel Zhang noted in an email to employees.

“We hope to spin off several listed companies, and after several years of development, these companies can spin off more listed firms, enabling our business to truly prosper,” he told staff.

After the radical reorganization, Alibaba will become a holding company. Zhang will remain at his posts while also serving as CEO of the Cloud Intelligence Group, taking charge of Alibaba Cloud, workspace messaging platform DingTalk, and the firm's artificial intelligence business. 

The Taobao Tmall Commerce Group will be led by Trudy Dai, a founding member of Alibaba and the president of its domestic digital commerce business section. Yu Yongfu will oversee the Local Services Group, which includes the navigation platform Amap and food delivery service 

The Global Digital Commerce Group will see Jiang Fan as its CEO, managing international e-commerce platforms such as AliExpress and Lazada. 

Wan Lin will serve as CEO of Cainiao Smart Logistics, while Fan Luyuan will steer the Digital Media and Entertainment Group, encompassing video platform Youku and film production company Alibaba Pictures Group. 

By improving its operating efficiency and optimizing costs, Alibaba's non-GAAP net profit rose 12 percent to CNY49.9 billion (USD7.2 billion) in the three months ended Dec. 31 from a year earlier, according to its latest earnings report. Revenue grew 2 percent to CNY247.8 billion (USD36 billion).

Editor: Martin Kadiev

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Keywords:   Alibaba,Reform