Jack Ma has returned to China after a year’s absence. His arrival coincides with the astute decision to divide Alibaba, the $255bn ecommerce giant he co-founded, into six parts. Alibaba’s share price rose 12 per cent in response. But there is little reason to think the split will make these businesses more competitive with rivals.
The rejig may however placate politicians and regulators intent on cutting Chinese tech giants down to size. Six small poppies make a less tempting target than one large one.
The new units encompass domestic ecommerce, cloud computing, local services such as food delivery, digital entertainment, international ecommerce and logistics. Each will have its own chief executive and the flexibility to raise funding, including via market listings.