Alibaba Group's Chairman and CEO Zhang Yong (File photo/NBD)

Alibaba Group said in a regulatory filing on March 28 that it is splitting itself into 6 business groups. The 6 groups will be made up of the Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics and Digital Media and Entertainment Group.

In response to the reasons behind, at a conference call on March 30, Zhang Yong, Chairman of the Board of Directors and CEO of Alibaba Group, said that the nature of each business unit in Alibaba is different, the development stage is different, and the customers and markets it faces are different. This makes organizational change more necessary and more difficult.

Zhang Yong said that after the establishment of 6 major business groups and N business companies, Alibaba will better play the role as a controlling shareholder, including controlling the board of directors of each company in the initial stage, but the business relationship will shift from business operations to asset and capital operations. "The biggest change is that each company has its own board of directors and governance structure, and qualified (companies) will form their own employee stock ownership plans, including independent third-party financing, and can also seek to go public independently," Zhang Yong said.

As for which business segments will get listed first, Xu Hong, Alibaba's chief financial officer, said that in all business segments and business companies, except for the current Taobao Tmall Business Group, all other business groups and companies can finance independently and look for an independent listing entity. 

Alibaba believes that the entire market is the best touchstone. "In the future, when all qualified business groups and companies have independent financing and listing entities, they could be listed one after another. After their listings, we will further evaluate their importance to the entire Alibaba Group to decide whether to maintain control or give up control," Xu Hong said.