Chinese e-commerce giant Alibaba Group is planning to reorganise the company into six business groups, a move that will mark the biggest overhaul in the platform company’s 24-year history.
Shares of the US-listed stock soared over 10% higher in pre-market trading on the back of the news, that will see each of the six business groups managed by its own CEO and board of directors as the company looks to further its growth and market opportunities.
“The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready,” Chairman and CEO of Alibaba group, Daniel Zhang told employees in an email on Tuesday, Reuters reported.
Zhang will continue to serve in that role while also taking over as the CEO of one of the business groups, Cloud Intelligence Group.
Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics, Global Digital Commerce Group, and Digital Media and Entertainment Group will form the other business groups as the company follows a holding management model.
“This transformation will empower all our businesses to become more agile, enhance decision-making, and enable faster responses to market changes,” Zhang said in the email to employees.
Under the new model each CEO will take full responsibility for company performance while each business and other investments will retain the flexibility to raise outside capital and seek an initial public offering. The exception is Taobao Tmall Commerce Group, which will remain an Alibaba Group wholly owned unit.
Image from Alibaba