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Alibaba's big transformation? Dolphin Jun's first take.

Ali announced another major organizational change today, setting up six major business groups and multiple business companies under the big group, including Aliyun Intelligence, Taobao Tmall Business, Local Life, Cainiao, International Digital Business, and Big Entertainment.

These business groups and companies will each establish their own board of directors, implement a CEO responsibility system under the leadership of the board, and Alibaba Group will become a holding company. At the same time, each business group and company can independently finance or go public where appropriate.

Although Ali's intention to consider business spin-offs and independent listings to release value has been expected by many, the scale and thoroughness of this organizational restructuring still came as a surprise. This reform means that the identity of the Alibaba Group has changed from a manager to a shareholder, and business decision-making power will be delegated to the frontline business companies themselves.

In this organizational structure, the decision-making chain and response speed of frontline companies will be significantly improved, and the internal disputes of the big group will also be alleviated. At the same time, each business company and manager will also make decisions and operate from the perspective of their own income/profit, avoiding non-core business departments from becoming "cost departments" supporting core businesses and transforming all of them into "profit departments."

From another perspective, this also means that each business company needs to establish its own mid-to-backstage system (with support from the big group level), and operating costs may increase.

In the short term, the market can talk about the logic of value release. The real impact will be the employee enthusiasm and potential profits that can be released after each department operates independently.

From another perspective, this also means that the Alibaba Group may be subject to valuation penalties by the holding company, because investors may prefer to invest directly in the subordinate business companies they like, rather than indirectly holding through the Alibaba Group. (Therefore, Alibaba will also have to make choices when listing those business companies separately.)

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