Alibaba’s Six-Pack Strategy

Alibaba’s Six-Pack Strategy

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  • Alibaba (BABA) announced that it will be restructuring itself into six business groups, each able to acquire external funding and pursue an IPO. This marks a major reorganization for the Chinese e-commerce powerhouse.
  • The shake-up will introduce a new dynamic to the company, with each unit now having its own CEO and board of directors. This could even lead to some of the smaller Alibabas becoming publicly listed. The six new business groups are dedicated to cloud computing, e-commerce, local services, logistics, digital commerce, and media, and Zhang will still remain on board as the Chief Executive and chair of the Alibaba holding group and head of the cloud business.

Why it matters

Just one day after Jack Ma made a rare public appearance in mainland China, Alibaba revealed a major restructuring plan in the hopes of reassuring investors and building stronger ties with the country's private sector. After facing a hefty $2.8 billion fine from Chinese regulators for monopolistic behavior, as well as the country's economic downturn and the emergence of new e-commerce competitors, Alibaba allegedly presented the restructuring plan to government authorities and received a positive response.


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