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Group chief executive officer Daniel Zhang will head up the cloud intelligence division, a nod to the growing role that AI will play in the e-commerce leader’s portfolio in the long run. He will continue to run the parent company.
The move coincides with the return to China of Alibaba founder Jack Ma, who reemerged this week after more than a year of laying low around the world. Credit:AP
International commerce chief Jiang Fan will head up the global digital business unit, while longtime executive Trudy Dai takes up the main Taobao Tmall online shopping division. Its other divisions include local services such as meal delivery, the Cainiao logistics group and digital media and entertainment.
“At 24 years of age, Alibaba is welcoming a new opportunity for growth,” Zhang said in a statement. “The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready.”
Alibaba has had previous success with spinoffs. It hived off Alipay in 2010, an unpopular move at the time that nonetheless led to the creation of Ant Group Co. The fintech affiliate controlled by Ma was on the verge of pulling off the world’s largest IPO before Beijing pulled the plug, and has said it would consider a second run at the market.
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Despite the creation of a half-dozen business lines, Alibaba on Tuesday reaffirmed the cost-cutting it had pledged to shore up the bottom line. That was a conservative shift for a tech conglomerate that once spent aggressively to dominate swaths of the economy, reflecting the dissipation of growth since Xi’s crackdown ensued in 2020.
Beijing has cracked down on the country’s tech giants over the last two years, forcing fundamental changes in the business models of companies including Alibaba. The e-commerce pioneer is also navigating increasingly tough competition from arch-rival JD.com as well as up-and-comers such as PDD Holdings and ByteDance.
“The innovative plan to split up its businesses, we assume, has had some kind of blessing from the authorities,” said Gary Dugan, chief executive officer at the Global CIO Office. “In which case, it will be seen as an elegant solution for unlocking the value inside the business.”
Bloomberg