NEW YORK (AP) – Alibaba is splitting into six business units as the Chinese e-commerce giant tries to respond to market changes and increase the divisions’ profitability.
Alibaba Group Holding Ltd. rose 8% at the opening bell.
Alibaba Group Holding Ltd. said in a regulatory filing on Tuesday that the six new groups will include Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics and Digital Media and Entertainment Group.
The company said that each group will be able to raise capital outside and can seek its own initial public offering, except for Taobao Tmall Business Group, which will remain 100% of Alibaba Group. Each group will be independent from its own CEO and Board of Directors.
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Black Intelligence Group includes Cloud, AI and DingTalk. The Taobao Tmall shopping group includes Taobao, Tmall, Deals Taobao, Taocaicai and 1688.com. Local operators include Amap and Ele.me, while the Global Digital Business Group (including Lazada, AliExpress, Trendyol, Daraz and Alibaba.com. Digital media and entertainment groups include Youku and Alibaba Pictures.
Alibaba has faced significant competition from short-form video platforms such as Douyin and Kuaishou, which also offer e-commerce services on their platforms. Its US-listed stock has fallen since a November 2020 regulatory crackdown on the tech industry that saw regulators suspend the IPO of its financial arm Ant Group and crack down on anti-competitive practices in technology. On Monday, Alibaba founder Jack Ma arrived in China after months of overseas travel. Ma founded Alibaba in 1990 and is China’s richest man.
Also Read: Check petrol and fuel prices in Delhi and other cities. He has kept a low profile with few public appearances since November 2020, when he publicly criticized China’s regulators and financial system during a speech in Shanghai. China’s government has sought to boost confidence in the private sector after regulations on technology, education, online gaming and the financial industry, as well as tough COVID-19 restrictions slowed the economy.
Ma resigned as Alibaba’s CEO in 2019, saying he hoped to focus on philanthropy. In January, it divested control of Ant, a fintech company, as part of a restructuring of its shares.
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