In the biggest organizational change in the Chinese e-commerce giant’s history, Alibaba announced on Tuesday that it will divide its operations into six companies, each of which will have the power to receive outside capital and list on a stock exchange.
The CEO and board of directors of each company group will be in charge of running it.
The action is “designed to unlock shareholder value and foster market competitiveness,” according to a statement from Alibaba.
Shares of Alibaba rose by more than 7% in American pre-market trading.
The decision was made after a trying couple of years for Alibaba, which saw its share price plummet by billions due to Beijing’s stricter regulations and the slowdown of domestic economic development. The previous several quarters have seen growth challenges for Alibaba.
With the rearrangement, Alibaba is attempting to revive growth at this time. Its strategic priorities will be the focus of the business groups. The groups are as follows:
- Cloud Intelligence Group: Daniel Zhang, CEO of Alibaba, will be in charge of this division, which will house the business’s cloud and artificial intelligence initiatives.
- Taobao Tmall Commerce Group: This group is responsible for the organization’s online retail websites, including Taobao and Tmall.
- Local Services Group: Yu Yongfu will serve as the company’s CEO, and its operations will include mapping and Ele.me, Alibaba’s food delivery service.
- Cainiao Smart Logistics: Wan Lin will remain as CEO of Cainiao Smart Logistics, the company that houses Alibaba’s logistics service.
- Global Digital Commerce Group: Jiang Fan will be the CEO of the Global Digital Commerce Group. This division houses AliExpress and Lazada, two of Alibaba’s international e-commerce sites.
- Digital Media and Entertainment Group: Fan Luyuan will serve as CEO of the Digital Media and Entertainment Group, which includes Alibaba’s streaming and movie businesses.