The move comes after reports that Alibaba founder Jack Ma, who has rarely been seen in public for the last three years, returned to China this week after a long absence.
The units will have their own chief executives and boards of directors. They will be allowed to raise capital and seek stock market listings, except for the online retail platform Taobao Tmall Commerce Group, which will remain wholly owned by Alibaba.
In filings to the US Securities and Exchange Commission and the Hong Kong Stock Exchange, the units will capture opportunities in their respective markets and industries, thereby unlocking the value of Alibaba Group's respective businesses. The market is the best litmus test, and each business group and company can pursue independent fundraising and IPOs when they are ready, said Daniel Zhang, chief executive, in a letter to staff.
China Technology analyst Rui Ma told the BBC that investors saw value in the restructuring because of the fact that Alibaba's business units will be able to grow at their own pace.
She said that each unit would be more streamlined and less likely to be subject to antitrust violations. The government has been less harsh on technology companies over the past few months. He said that people are wondering if this could be the beginning of a period in which the government shifts from being an adversary to companies to actually supporting them.
The 58-year-old has kept a low profile since criticising China's financial regulators in 2020. He stepped down as chairman of Alibaba in September 2019.