Breakin’ up
This week, Alibaba’s elusive founder Jack Ma was spotted in China for the first time in a year. The reason for his reappearance soon became clear: a major breakup was about to go down. Indeed, the next day the Chinese tech giant announced plans to split its mega-business into 6 units.
The restructuring will see its 6 main divisions — Chinese e-commerce, cloud computing, global e-commerce, media and entertainment, logistics, and digital mapping/food delivery (local consumer services) — become independently-run companies. Except for Chinese e-commerce, each unit will be able to seek outside capital, with potential IPOs already being touted.
Crackin’ down
The move is being hailed as a sign that the CCP's multiyear crackdown on tech giants is beginning to ease. Baba, at times, has taken the brunt of that scrutiny, having been slapped with a record fine of ¥18.23 billion ($2.8bn) just 2 years ago after regulators accused the company of abusing its market dominance.
The business, often known as "China's Amazon", has really established that dominance over the last 10 years, with 2012's ¥20 billion ($2.9bn) revenue growing to ~¥850 billion ($124bn) in 2022. Chinese e-commerce, the only division remaining in sole control of the parent company, accounted for nearly 70% of that figure, bringing in a whopping ¥593 billion ($86bn) last year.