Alibaba announced its plan for a spin off of its cloud division as a separate, publicly traded company. This came not long after the e-commerce giant announced that it will list its grocery arm Freshippo and logistics arm Cainiao Smart Logistics Group earlier.
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).
The CEO also said that Alibaba’s board approved plans to begin Freshippo’s IPO process and Cainiao will explore an IPO in the next 12 to 18 months.
The spin off of its cloud unit is expected to complete in the next 12 months, which would allow it to optimize operations.
The cloud spinoff was intended to simplify the structure and respond to market needs, according to Zhang. He noted that a standalone platform such as this entity could grow to someday even surpass Alibaba itself in size if it attracted the right external financing.
Alibaba announced in late March that 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.