Alibaba Group takes steps toward organizational change

Chinese tech heavyweight Alibaba Group Holding Ltd announced on Thursday night that it has approved a full spinoff of its cloud intelligence unit from the company as well as the external financing for its international digital commerce unit.

The company said in its earnings report that it expects the listing of Freshippo, its supermarket chain, will be completed in the next 6 to 12 months, while it is targeting completion of the IPO for its logistics arm Cainiao Network in the next 12 to 18 months.

The move is part of Alibaba’s update on implementing the biggest organizational change in its 24-year history. The company announced in March that it would split its business into six main units, with each separate business having the flexibility to raise outside capital and seek its own initial public offering.

The company has also approved the nominated slate of directors for its six business units. Under the new structure, Alibaba will follow a holding company management model, while each of the units will be managed by its own chief executive and board of directors.

The six units covers cloud intelligence, Taobao Tmall commerce, local services, Cainiao smart logistics, global digital commerce, and digital media and entertainment.

Alibaba reported revenue of 208.2 billion yuan ($30.3 billion) during the January-March period, representing a 2 percent year-on-year increase. Its net income was 22.0 billion yuan, compared with a net loss of 18.4 billion yuan during the same period last year.

For its fiscal year ending March 31, Alibaba said its total revenue stood at 868.7 billion yuan, up 2 percent year-on-year. It’s net income reached 65.6 billion yuan, an increase of 39 percent year-on-year.

“In an increasingly complex world, we have proactively transformed our organization to strengthen the competitiveness of our businesses through creating greater independence to address the evolving needs of different customers and capture new opportunities,” said Daniel Zhang, chairman and CEO of Alibaba Group.