Alibaba set to split in 6 smaller companies – What’s going on?

Alibaba Group

As per a new report, it seems that the Alibaba Group will do some changes to its existing business model. Rather than operating as a single company, the group will split into six companies. These distinct firms will seek fundraising and market listings. China is easing its crackdown on private enterprises, and now the company wants to take a ride on this opportunity.

Alibaba Group will become a holder of six firms

The big restructuring will see Alibaba splitting itself into six organizations. There will be a firm for media and entertainment, another one for cloud services, one for AliExpress, and so on.

Worth noting that this move came just one day after Jack Ma’s return to China. To those unaware, Ma is an iconic personality due to his critical behavior regarding China’s policies. However, in recent months, this relationship has been far more stable. We believe that the latest move was a clear indication of China’s new approach when it comes to private business. China wants to boost the economy, and it’s natural to give some relief to the giants there. Alibaba has been experiencing tough years with multiple lunges from regulators. Perhaps, things will change now.

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Alibaba’s Chief Executive Danial Zhang states that the new goal is to build a streamlined organization. The group will now be “more agile and respond faster”. He will remain in his place as chairman and CEO of the group. The difference is that now he is been at the command of a holder.

Worth noting, that each of the new six businesses will also have a CEO and board of directors. These will need to show the ability to raise capital outside of the group. The exception is Taobal Group, it will still be owned by Alibaba Group.

Some reports indicate that this move also aims at the US regulators. With the restructuring, it may be easier for these companies to attract international investors. We are curious to see if this move will help the group to become a massive force in the international markets.

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