By CHENG Lu

Alibaba announced on Thursday that it will no longer pursue the complete spin-off of Alibaba Cloud and will defer the IPO plans for Hema Fresh.

“No matter how successful the past business model has been, it must be turned over and start with a zero mindset to awaken the spirit of entrepreneurship,” said Eddie Wu, CEO of Alibaba Group. “Alibaba is embarking on a new entrepreneurial journey and preparing to fully invest in technological innovation.”

The term “change” has been a lot in Alibaba’s PR for almost a year. In March, shortly after Jack Ma’s return to China, Alibaba restructured, with individual divisions encouraged to seek independent financing and listing.

Wu has a new strategy for Alibaba. A governance mechanism and incentive system with high flexibility and rapid decision-making will allow each business line to develop independently.

Alibaba will also leverage its strategic incubation function. Wu noted that businesses that meet user needs and align with the trend of AI-driven transformation will be the priority for investment.

According to the US Securities and Exchange Commission (SEC), Jack Ma’s family trusts JC Properties and JSP Investment plan to reduce their holdings by 5 million Alibaba founder shares next Tuesday, involving approximately US$870 million (6.3 billion yuan), and coinciding with changes to the spin-off plan. Alibaba stock dropped by nearly 10 percent on the news.

In Q3, Cloud revenue was 27.6 billion yuan, only 2 percent more than this time last year. The revenue of Alibaba’s international digital business group was 24.5 billion yuan, up 53 percent, with significant growth potential remaining.