August 14, 2022

DealBook: Alibaba Group to Split E-Commerce Site, Talks I.P.O.

SHANGHAI — The Alibaba Group, one of the biggest Internet companies in China, said Thursday that it had decided to split its popular
e-commerce site, Taobao.com, into three separate units to better foster growth, dashing investors’ hopes of an imminent public listing of the unit.

The Alibaba Group did, however, raise for the first time the tantalizing prospect that it might go public at a later date.

The split breaks Taobao — a fast-growing online marketplace for consumer goods — into a consumer marketplace like eBay, an online shopping mall consisting of major retailers and internationally known brands and an Internet search engine focused on e-commerce.

The decision eliminates the possibility that the company’s Taobao unit or any of its three parts will seek an initial public offering in the coming months, according to John Spelich, a spokesman for the Alibaba Group.

Many investors had been pressing Alibaba to list the Taobao unit, saying it would probably become one of the most valuable Chinese Internet companies.

Jack Ma, the former English teacher who runs the Alibaba Group, has for years said that a Taobao listing was not imminent and that the unit had to focus first on development. Another Alibaba Group unit, Alibaba.com, was publicly listed in Hong Kong in 2007 and is now valued at about $7.5 billion.

But in a letter to employees released Thursday, Mr. Ma said that the company was considering listing the Alibaba Group. Although no timetable was given, and people close to the company said it was unlikely to happen within the next year, it was the first time Mr. Ma had talked about publicly listing the Alibaba Group. The American Internet company Yahoo and Softbank Group of Japan own most of the Alibaba Group.

“We won’t rule out the possibility of taking Alibaba Group public in the future, as a way to reward our employees and shareholders who support and continue to believe in us,” Mr. Ma said in the letter, which the company posted online.

The statement comes at a time when Alibaba and the major shareholders, Yahoo and Softbank, are trying to resolve a dispute over another Alibaba unit, Alipay, which was transferred to a Chinese company that is majority-owned by Mr. Ma. Alibaba said the transfer had been made to comply with Chinese law about licenses for online payment companies, but Yahoo said it had been done without the board’s approval.

Alibaba is also trying to recover after the chief executive and chief operating officer at its Alibaba.com unit resigned in February following an internal fraud investigation. Although the two executives were not involved in the fraud, they took responsibility for misdeeds committed by a small number of employees inside Alibaba.com.

The company said about 100 employees had allowed fake companies in China to register and sell products on Alibaba.com’s international Web site as “Gold suppliers,” which suggested that they were among the more trustworthy. Instead, those companies were taking orders for goods, accepting payments and then closing down their operations and escaping with the money.

Article source: http://feeds.nytimes.com/click.phdo?i=092a3703f734b7b9c0e7293ef60f6cd6

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