The Future. Alibaba is being split into six separate companies that will focus on specific sectors of the Alibaba empire… or what’s left of it. While positioned as an efficiency-play, many observers note that the split is more of a stripping-for-parts of the tech behemoth that Jack Ma once presided over. It may be a warning to other Chinese power players that, in China, there is such a thing as too big to succeed.
Alibaba is splitting into six independently run companies.
- The new businesses will cover cloud computing, logistics, Chinese e-commerce, global e-commerce, digital mapping and food delivery, and media and entertainment.
- Each company will have its own CEO reporting to a board of directors, and will also be able to raise its own money and IPO on its own.
Current Alibaba CEO Daniel Zhang will run a holding company that oversees each (with its Chinese commerce business remaining a wholly owned unit under it). Zhang says that the company split will help make the massive organization more nimble and efficient.
The company split is an odd but inevitable outcome for the tech giant that, back in 2020, was worth over $800 billion and preparing for potentially the biggest IPO in history. The company’s largesse was because of its centralization — the “Alibaba Economy.”
But that was also the year co-founder and former CEO Jack Ma criticized Beijing, which rubbed Communist Party leaders the wrong way. Alibaba, and the entirety of the Chinese tech sector, was punished… and the industry hasn’t recovered since.
Heck, Ma just returned to China after being in quasi-exile.