Alibaba plans major restructuring

Shanghai Daily, July 24, 2012

Alibaba Group said yesterday it will restructure its business into seven groups as a part of its efforts to improve efficiency and better share resources within the fast-expanding company.

The seven business groups, covering Alibaba's consumer sites Taobao and Tmall, B2B site Alibaba.com and other service units, are expected to better link small business owners and consumer-targeted companies.

In an open letter to employees, Alibaba Chairman Jack Ma said the group hopes to be better prepared under unfavorable economic situations to help small companies grow their businesses.

"Our ultimate goal is to build an open, collaborative and prosperous e-commerce service ecosystem by enhancing our capabilities to serve consumers as well as enterprise customers," Ma said yesterday.

The structural adjustment could also pave the way for the group's potential stock market listing.

Alipay was not included in the group's business as it is controlled by Zhejiang Alibaba E-commerce Co, a private company controlled by Ma and Xie Shihuang, another co-founder of Alibaba Group.

Alibaba has been extending its services in past years to consolidate its leading position in the online shopping sector, offering daily deals to allow online vendors a better way to promote their products. It also launched a search engine comparing prices among various external shopping sites.

But there are some concerns that its businesses are growing too fast and issues like lack of management and scrutiny have arisen.

Alibaba.com was delisted last month from the Hong Kong stock exchange.