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Alibaba Group Splits into Seven New Units

The Alibaba Group has announced a reorganization splitting the company into seven major business groups.  The seven groups will be made up of online shopping marketplaces (1)Taobao.com,  (2)eTao, (3)Tmall.com, (4) Ju Hua Suan, (5) Alibaba International Business Operations (formerly the B2B unit); (6) Alibaba Small Business Operations (the domestic B2B unit); and (7) AliCloud, the Group’s cloud computing and information technology group.  The presidents of the seven business groups will report directly to Alibaba Chief Executive Jack Ma.

Alibaba.com was delisted from the HK Stock Exchange in May.  The primary reason for taking Alibaba.com private was the recognition that web based services will slow and the company had to focus on value added as a means to grow revenue and profitability.  The shift in strategy would have reduced growth and profitability. 

In a first step of metamorphosis seven operating units emerged signaling a sharper management focus on individual business units and a clear separation of consumer (shopping market places) and b2b businesses (buyer – seller conduits) units.  All companies will be supported by cloud computing and central IT resources.  Alipay, Alibaba’s online payment company, will remain an affiliate of Alibaba Group and a supporting resource for the consumer and business units.

Source:  Investors.com

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