The latest moves are signs of a further partitioning between the e-commerce giant and the operator of popular payment app Alipay, as the latter awaits Beijing’s nod to transform into a financial holding group. Ant, whose initial public offering was called off at the last minute in late 2020 under pressure from Beijing, has been restructuring itself as it seeks a green light from regulators.

“Ant senior staff will have substantially less influence on Alibaba. It’s another step in weakening the relationship between Alibaba and Ant,” said Chelsey Tam, a senior equity analyst at Morningstar. “The good thing is that Alibaba is more likely to make decisions based on what is good for Alibaba and not necessarily good for Ant.”

However, Tam said the flip side for Ant was that it could no longer rely on Alibaba to help boost its valuation.

“Ant’s selling point and high valuation back in 2020 was that it had Alibaba’s data and support, partly due to the participation in Alibaba’s partnership,” she said. “[If both can share data] Ant can understand more comprehensively its customers’ credit profiles because they are also Alibaba’s e-commerce merchants. The costs of managing credit risk could [now] increase for Ant.”

Wang Pengbo, a senior analyst at consultancy BoTong Analysys, said the separation would allow each side to make business decisions from their own perspective, giving them more opportunity to grow.

Albert Ma, a former Alibaba employee (no relation to Jack Ma), said the partitioning started “at least a few years ago”. Alibaba not only made changes to its internal website to emphasise the separation, but also tried to make its own staff less connected, he said.

“For example, we used to be able to see the job level of an employee [at Ant] and directly contact them through the internal website, but Alibaba later disabled the function.”

Chinese media Latepost reported in July that changes were also being made to the internal transfer process. Alibaba staff who wanted a transfer to Ant now need to resign first, the article said, citing people familiar with the matter.

Ant Group’s payments platform Alipay is most trusted brand in China

Formally established in October 2014, Ant Group traces its origins back to Alipay, which itself was launched in 2003 as part of Taobao, Alibaba’s e-commerce platform. Alipay has since grown into the world’s largest mobile payment services platform.

For nearly a decade, Ant was under the leadership of Lucy Peng Lei, a founding member of Alibaba, before Eric Jing took over as chairman in 2018.

The move away from Ant comes after Alibaba experienced a difficult year, with stagnant revenue growth, capital market risks, as well as national security and data protection issues at home.

For the March quarter, the company reported 9 per cent year on year revenue growth, the slowest pace on record, on the back of a slowing Chinese economy amid ongoing pandemic lockdowns. Net income fell 59 per cent year on year to 62 billion yuan (US$9.1 billion) during the 12 months ended March.

Against this backdrop, Alibaba is taking measures to restructure itself in an effort to drive new growth and achieve better cost-efficiency. Last December, the company unveiled a restructuring plan that split its global and domestic e-commerce units. Jiang Fan, former Taobao and Tmall president, pivoted to the new role of head of Alibaba’s new International Digital Commerce unit, which includes AliExpress and its Southeast Asian e-commerce business Lazada.

“We also must be conscious of the unpredictable nature of a market in a volatile environment,” Alibaba chairman and chief executive Daniel Zhang Yong wrote in a letter to shareholders in late July. “We must make the organisation more agile and flexible, and allow every unit … to learn quickly and act proactively.”