Alibaba transforms itself into six huge divisions

E-commerce superpower Alibaba plans to split into six enormous business units in the biggest shakeup since the company was founded in 1999.

Photo by Kuang Da

Photo by Kuang Da



Alibaba Group plans split its US$223-billion empire into six massive business units in the biggest restructuring since the company was founded in 1999.

Daniel Zhang, CEO of the e-commerce giant, sent out an internal memo on Tuesday afternoon in which he announced the changes.

New bosses, new boards

The six units will be Cainiao (smart logistics), cloud intelligence, digital media and entertainment, global e-commerce, local services, and Taobao-Tmall. Each of the new divisions will have its own CEO and board of directors.

While remaining the CEO of Alibaba, Zhang will also serve as CEO of cloud intelligence.

Trudy Dai, one of the 18 founding members of Alibaba, will be the CEO of Taobao-Tmall.

YU Yongfu will become the CEO of local services. This division includes quite a range of functions including the web-mapping app AutoNavi, a restaurant review business and Fliggy, an online travel agency.

WAN Lin will remain as CEO of Cainiao. JIANG Fan will run global digital commerce, and FAN Luyuan the digital media and entertainment group.

Space for N more

Alibaba is referring to the restructuring as “1+6+N.” The “1” is Alibaba Group and “6” refers to the six business units. “N” represents future possibilities for more businesses to emerge as the market develops and expands.

In the announcement, Zhang said the market will determine everything.

He expects the new entities to find their own ways to profitability. Each group will function as independently as possible and all will be free to compete with one another. Each CEO will be in charge of the division’s own fundraising. Whether or not to push for an IPO will be down to the new boards of each section.