China's e-commerce giant plans to split its online shopping site platform Taobao.com into three units—Taobao, Tmall.com, a B2C platform, and Etao.com, a search engine for consumers to locate products.

The split will create more value for the whole industry and more benefits for the company and shareholders, said Jack Ma, President of Alibaba, who owns Taobao.

The three units can better focus on their own fields and be more flexible in management after the restructuring, he said.

Taobao.com had 370 million registered users by 2010. In the first quarter of 2011, the site controlled 90 percent of China's C2C market, with transaction value totaling 125.1 billion yuan ($19.2 billion), according to data from the Shanghai-based iResearch Consulting Group. But the company is facing increasingly fierce competition as Internet gurus like Baidu and Tencent make a push into e-commerce.

"The break-up is part of efforts to diversify our businesses and focus on needs of targeted group of consumers," said Shao Xiaofeng, Vice President of Alibaba.

Most importantly, the move is expected to accelerate Tmall's forays into the thriving B2C sector, said Su Huiyan, a senior analyst with iResearch.

"Independent operations allow the Tmall to better develop higher-end brands, and make a distinction with the more affordable products on Taobao," she said.