Alibaba gives more power to subsidiaries and is already studying formal business division

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the president of the Alibaba Group Holding, Daniel Zhang, is empowering the heads of the company’s business units to become more agile in addressing growing challenges and potentially paving the way for a separation, people familiar with the matter said.

Zhang is shifting more responsibilities to the presidents of each line of business – from location-based services to cloud computing – who now function as “mini-CEOs,” the sources said.

The strategy aims to accelerate decision-making so that each division can better face competition, revitalize declining sales and reshape its monolithic image in the wake of regulatory crackdown on Beijing against large platforms.

The change in management, which has been taking shape in recent months, reverses a centralization movement that began almost three years ago. This initiative placed the company’s subsidiaries and affiliates in a tight alignment, the so-called Alibaba Economy, created by the former head of the company, Jack Ma.

In the long term, the changes could pave the way for Alibaba to separate the smaller subsidiaries and seek separate listings for them, people with knowledge of the matter said.

Units that may be ready for deployment in the future include Cainiao Smart Logistics Network, Freshippo supermarket chain, a local services department comprising Alibaba’s various location-based service applications and the Lazada and Trendyol offshore e-commerce platforms, they said.

The new management model was not formally announced within Alibaba. However, in recent months, “building an agile organization” has become a popular refrain within the company, people said.

Reference: CNN Brasil

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