Alibaba split into 6 units: should Amazon take note?

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on Mar 28, 2023
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  • Alibaba Group says it will split into six separate business units.
  • Brittain Ladd sees it the right move for Amazon.com Inc as well.
  • Amazon stock is currently down 15% versus the start of the year.

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Alibaba Group Holding Ltd (NYSE: BABA), on Tuesday, revealed plans of splitting into six businesses to unlock shareholder value and relish regulatory benefits as Invezz posted HERE.

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That leaves us with an important question: should Amazon.com Inc (NASDAQ: AMZN) do the same?

Former Amazon executive says it totally should

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According to Brittain Ladd – business and supply chain expert and a former Amazon executive, the tech behemoth could certainly reclaim its magic if it chooses to walk in the footsteps of its Chinese rival.

Interestingly, Ladd recommended that Amazon splits into separate units originally in 2018. At the time, neither executives nor the Wall Street saw it as a viable option. On Tuesday, though, he wrote on his personal blog:

Beginning in 2021, executives at Amazon reached out to me and asked whether or not Amazon should split up. I replied that they should. I encourage Jassy to make this a priority.

Versus its year-to-date high, Amazon stock is down 15% at writing.

Ladd shares units that Amazon could be split into

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Higher shipping costs, an unprofitable Alexa unit, and declining sales that no longer spare even the Amazon Web Services business were among reasons cited for the proposed split. Ladd added:

Alibaba provides Amazon CEO Andy Jassy with an opening for broaching the subject of splitting up with his S-team. In order for Amazon to disrupt other industries, it should first disrupt itself by breaking up.

The business consultant who said he wasn’t concerned about the Amazon stock price on a recent Invezz podcast suggests that Amazon be split into the following businesses:

  • Physical retail and technology
  • eCommerce
  • Media and entertainment
  • Cloud and technology
  • Robotics and automation
  • Logistics
  • Healthcare and pharmacy
  • Aviation
  • Banking and finance
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