Alibaba Group founder Jack Ma engineered from abroad the corporate breakup of his e-commerce empire, as he wanted to make it more competitive and efficient in China.
The Wall Street Journal (WSJ) newspaper, citing people who are close to the development, reported that the Chinese tech billionaire, despite stepping down in 2019, remains an influential figure in the top management and is active in deciding its strategy.
On Tuesday, Alibaba group said that it is planning to split the company into six units and would look for fundraisings or listings for most of them, marking the biggest restructuring in its 24-year history.
The firm will be divided into Cloud Intelligence Group, Taobao Tmall Commerce Group, Local Services Group, Cainiao Smart Logistics Group, Global Digital Commerce Group and Digital Media and Entertainment Group.
The company made the announcement a day before Ma’s surprise visit to a school in Alibaba’s hometown of Hangzhou.
The move, which raised eyebrows among experts, has triggered speculation about whether Ma struck any deal with China’s government.
Analysts say that the shake-up is being done to ease scrutiny over the tech giant whose sprawling business has been a target of regulators for years.
The WSJ reported that it has been in the planning stage for months, adding that Ma held talks with Alibaba’s top executives, including the current Chairman and Chief Executive Daniel Zhang, in recent months.
The Chinese tech billionaire has largely been absent from the public eye since his company came under the radar of Beijing’s officials two years ago.
As he was abroad, Alibaba was slapped with a $2.8 billion antitrust penalty in April 2021. Its affiliate fintech giant, Ant Group Co., had to suspend its much-awaited IPO at the 11th hour in 2020 upon the orders of Chinese regulators who demanded an overhaul of its business.
The business tycoon’s return to the mainland was possible because of repeated overtures through retired Communist Party officials and fellow tycoons, the WSJ reported citing sources.
It is said that they cajoled Ma by invoking his patriotism, and asking him to contribute to China’s development.
(With inputs from agencies)
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