Ant Group severs further with Alibaba, as the e-commerce giant seeks for primary listing in Hong Kong

July 26, 2022 0 Comments

Nine Alibaba partners have left the company’s partnership, reducing the company’s total number of partners from 38 in 2021 to 29, according to Alibaba’s annual report released on July 26. The nine previous partners include two who have retired from Alibaba, and seven Ant Group executives.

The seven Ant Group executives include Chairman Eric Jing, Chief Technology Officer Xingjun Ni, Chief People Officer Songbai Zeng, President of International BG Angel Zhao, Senior VP Minzhi Wu, Chief Sustainability Officer Yijie Peng, and Vice President Wenlan Shao.

Under the Alibaba recently amended Partnership Agreement which was created in 2010, all partners shall be Alibaba Group employees, and employees of Alibaba affiliated companies including Ant Group no longer serve as partners since May 31, 2022.

Alibaba has attributed the change to its corporate restructuring. According to its 2022 Annual Report, “to ensure that partners’ interests are aligned with those of our shareholders, we require each partner to maintain a significant number of shares in our company during his or her tenure as a partner, and “have been with our firm for no less than five years”.

Ant Group traces its roots back to Alipay, Alibaba’s mobile payment service which was established in 2004, and spun off from Alibaba in 2011. While Alibaba still holds a 32.65% stake in Ant Group, the companies have been separating their operations since 2020.

Alibaba’s recently released annual report also mentioned the revision of several commercial agreements, including one with Ant Group. Effective July 25, Alibaba and Ant Group terminated their data sharing agreement and would “instead negotiate the terms of data sharing arrangements on a case-by-case basis and as permitted by applicable laws and regulations. ”

The two’s data sharing agreement has been in effect since August 2014 and has been questioned in regards to data security and users’ personal privacy. In 2020, when Ant Group was racing to list in STAR Market, the Shanghai Stock Exchange inquired the company about its acquirement, use and management of data, boundaries of the data it collects, and whether the company has a mixed data pool or infringes users’ privacy.

Alibaba, China’s biggest e-commerce company, is seeking a primary listing in Hong Kong by the end of 2022. The company’s further severance with Ant Group might be part of its dual listing preparation. Alibaba’s stock rose by over 4.82% at the time of writing.

The GMV of the Alibaba ecosystem reached 8.317 trillion yuan, with 7.976 trillion GMV generated by its Chinese consumer-facing businesses. The company counts 1.31 billion active consumers globally, including more than 1 billion in China, and 305 million from overseas.

According to Alibaba’s previously released financial report, the company saw its annual revenue rise 19% year-over-year, reaching 853.062 billion yuan, yet its net profit attributable to common shareholders was down 59% year-over-year to 61.959 billion yuan. Alibaba’s non-GAAP net profit was 136.388 billion yuan, down 21% year-over-year, mainly due to a decrease in the market price of Alibaba’s equity investments in listed companies.

“This past year, Alibaba has made a series of organizational and cultural changes that will serve as a new beginning for future growth,” says Danial Zhang Yong, Chairman and CEO of Alibaba Group, in a letter to shareholders.”We must also be aware of the unpredictability of the market in a turbulent environment, so we must make the organization more agile and flexible so that each individual within the organization learns quickly and acts proactively, and so that Alibaba’s future is based on the common drive of different business engines crawling forward.”

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