Alibaba begins company transformation

Alibaba Group Holding Ltd will become more of an asset and capital operator, rather than a commerce operator, said Zhang Yong, chairman and CEO of the company, at a conference call with investors on Thursday morning.

Zhang said Alibaba's structuring will allow all of its business units to become more agile, enhancing decision-making capability and enabling faster responses to market changes, adding that the company began laying the foundation for this transformation years ago.

Xu Hong, chief financial officer of Alibaba, said on the call that the market is the best litmus test, and each business unit can pursue independent fundraisings and their own initial public offerings when they are ready. The only exception is the Taobao Tmall commerce group, which will remain wholly owned by Alibaba.

Xu said Alibaba will continue to evaluate the strategic importance of these units to the whole group units after they go public, and then decide whether to remain the right of control. "Going forward, we will assess the stock repurchase program based on the company's cash flow and other investments."

Alibaba announced on Tuesday night that it will split its business into six main units, the most significant organizational change to the company in its 24-year history. The six units will cover cloud intelligence, Taobao Tmall commerce, local services, Cainiao smart logistics, global digital commerce and digital media and entertainment.

fanfeifei@chinadaily.com.cn