China’s Alibaba Group said on Thursday it will monetize non-core assets and explore selling some businesses as it reinvents its operation following a regulatory crackdown that erased 70% off its stock.
Group CEO Daniel Zhang stated that the split of the business into six units will allow each to become more nimble, respond more quickly to market shifts, and issue their own initial public offerings (IPO).
His remarks follow Alibaba’s announcement of the company’s most sweeping restructuring ever. The shift to a holding company structure by Alibaba is unprecedented among China’s major technology firms but may serve as an example for its rivals.
The six units that Alibaba plans to split into comprises of; Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media and Entertainment Group.
Alibaba’s statement that it may divest from assets and sell control of business units after going public comes more than two years after Beijing cracked down on its digital giants for monopolistic behavior, data security, and other issues.
The split shed some light for many investors that were weary with strict regulations that once derailed Jack Ma’s $37 billion IPO just days before its launch.
Although the new business units will have their own CEOs and boards, Zhang stated that Alibaba will keep seats on those boards in the short run.