Widgetized Section

Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone

Alibaba will be split into six business groups, all of which will be able to finance their own listings

Posted by on 2023/03/30. Filed under Breaking News,China,Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

China’s Alibaba Group announced on Tuesday that it would become a holding company with six different business groups. The major reorganization heralds a possible breakup of China’s largest e-commerce company.

Alibaba called the restructuring “the most significant organizational change” in its 24-year history. It said each of the restructured divisions would have its own chief executive and board of directors to allow faster decision-making.

The groups, which are controlled by Alibaba, will be allowed to seek outside capital with a view to eventually listing. Only its Chinese e-commerce arm, Taobao Tmall Business Group, will remain wholly owned by Alibaba.

Alibaba’s American-listed shares rose more than 14 percent on Tuesday.

Alibaba’s possible decision to split the company into several entities may assuage the government’s concerns about the concentration of power and influence in the hands of China’s online giants.

“Breaking up the company into different parts seems to fit with a general desire to avoid antitrust scrutiny, which has been a problem not just for Alibaba but for other companies in China,” said Graham Webster, editor of the Digital China Project at Stanford University’s Center for Cyber Policy.

For now, the government appears to be loosening its grip on the tech industry. Government regulation has allowed the industry to survive a tumultuous three years marked by the disappearance of Jack Ma, Alibaba’s billionaire founder, from public view. He was forced out in 2020 after criticising Chinese regulators for stifling innovation at Alibaba’s fintech sister company Ant Group.

Mr Ma was once gregarious and outspoken, a symbol of China’s global competitiveness. But he has kept a low profile in recent years, choosing to spend most of his time abroad. The whereabouts of China’s most famous businessman, Jack Ma, was once a source of curiosity.

This week, Mr. Ma reappeared in mainland China after a long absence. It is unclear what impact the timing of Mr. Ma’s reenactment had on Alibaba’s announcement. Although he retired from the company in 2019, he remains one of its largest individual shareholders.

After Ma made critical comments in 2020, Chinese officials suspended Ant Group’s planned initial public offering. Chinese regulators forced Ant Financial to register as a financial holding company and separate its payment app from its financial services. Ant Group is still private. Since then, regulators have fined Alibaba 18.2 billion yuan for abusing its dominant market position.

In January, Ant Group said Mr. Ma had planned to give up his controlling stake in the company. Around the same time, China’s top Communist Party official at the central bank declared that a so-called rectification campaign against big tech was “basically complete.”

Alibaba said the move to spin off different businesses so they could be listed separately would “unlock greater value”. Alibaba’s stock has fallen about 70 percent since it became a target of the tech industry.

comments powered by Disqus