Alibaba Group Holding Ltd (阿里巴巴) plans to split its US$220 billion empire into six main units that would individually raise funds and explore initial public offerings (IPOs), in the biggest overhaul of China’s e-commerce leader since its inception more than two decades earlier.
The move frees up the Chinese company’s main divisions from e-commerce and media to the cloud to operate with far more autonomy, laying the foundation for spin-offs and market debuts. Its shares climbed more than 4 percent in premarket trading in New York.
The shift to a holding company structure is rare for major Chinese tech companies. It marks a departure from the Internet company’s traditional preference for keeping most of its operations under one roof, running everything from supermarkets to datacenters under the main Alibaba umbrella.
Photo: Bloomberg
It is also a strong signal that Alibaba is ready to tap investors and public markets, after Chinese President Xi Jinping’s (習近平) administration’s clampdown on Internet spheres wiped out more than US$500 billion of its value.
“The news follows Beijing’s vow to support private sector. If China wants to achieve its 5 percent GDP growth target, they need to support companies like Alibaba,” said Steven Leung (梁偉源), executive director at UOB Kay Hian Ltd (大華繼顯控股) in Hong Kong.
Alibaba’s announcement yesterday coincided with the return of its billionaire cofounder Jack Ma (馬雲) to China after more than a year abroad.
Group chief executive officer Daniel Zhang (張勇) is to head up the cloud intelligence division, a nod to the growing role that artificial intelligence would play in the e-commerce leader’s portfolio in the long run.
Former international retail chief Jiang Fan (蔣凡) is to head up the digital business unit, while longtime executive Trudy Dai (戴珊) takes up the main Taobao Tmall (淘寶天貓) online shopping division. Its other divisions include local services such as meal delivery, the Cainiao (菜鳥) logistics group and digital media and entertainment.
Despite the creation of a half-dozen business lines, Alibaba yesterday 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 past two years, forcing fundamental changes in the business models of companies including Alibaba.
The e-commerce pioneer is also navigating increasingly tough competition from archrival JD.com Inc (京東), as well as up-and-comers such as PDD Holdings Inc (拼多多) and ByteDance Ltd (字節跳動).
“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.”
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort