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SHANGHAI (Reuters) - Chinese e-commerce giant Alibaba Group announced on Tuesday it will split into six business units, each with its own CEO and board of directors, and adopt a holding company management model, in the biggest revamp of its 24 year history.
Alibaba has long relied on e-commerce as its core business, with smaller divisions in sectors such as cloud computing and entertainment.
The company's CEO Daniel Zhang said the business units will each be free to pursue funding and IPOs independently, which points to a possible carving out in the future.
Below are the six divisions:
TAOBAO TMALL COMMERCE GROUP
The Taobao Tmall Commerce Group will cover Alibaba's domestic-facing e-commerce marketplaces, which make up over two-thirds of Alibaba's total revenue. Taobao and Tmall are China's dominant e-commerce marketplaces in China.
Despite the scale of Alibaba's e-commerce operations, growth in the business has slowed.
Last quarter, revenue in Alibaba's China Commerce category fell 1% year-on-year, reflecting maturation in China's overall e-commerce sector but also the impact of the country's COVID curbs, stiff competition from rivals, and slowing economic growth.
Taobao Tmall Commerce Group will remain wholly owned by Alibaba Group after the restructuring, the company said, even as the other units will be free to seek fundraisings and listings.
It will be led by Trudy Dai, a member of Alibaba's founding team. Dai was appointed to lead the domestic e-commerce businesses in December 2021 when the company reorganised its international and local e-commerce businesses.
GLOBAL DIGITAL COMMERCE GROUP
Alibaba's Global Digital Commerce Group includes its overseas e-commerce marketplaces such as Lazada, which serves Southeast Asia, and AliExpress, which has become popular in Russia, Latin America, and parts of Europe.
These platforms face fierce local competition in the markets they operate in outside of China and make up just 8% of Alibaba's total sales.
However, together with Alibaba's other overseas e-commerce platforms, they are some of the company's fastest-growing divisions.
After the restructuring, the group's CEO will be Jiang Fan who had been leading Alibaba's international e-commerce businesses since December 2021. Jiang previously oversaw the Taobao and Tmall businesses.
CLOUD INTELLIGENCE GROUP
Alibaba's Cloud Intelligence Group includes Aliyun, the company's cloud computing unit. The company is the dominant player in China's domestic cloud computing sector, with a 36% market share, according to research firm Canalys.