Two points there.

First, breaking up a company isn't a plan to keep it small forever, in the same way that pulling weeds doesn't imply some insane belief that you've conquered weeds forever.

Second, this isn't some "Oh dear, I say chaps, Alibaba has gotten rather large and it needs to break up" on the part of Alibaba. China doesn't allow corporate independence anymore than they allow personal independence, and after Jack Ma had to be "re-educated" for speaking truth to power, there has been a push to keep companies in line.

Clearly some people in power believe that Alibaba needs to be smaller and more manageable, but not for the sorts of reasons that we might hope to see in regards to big tech in the West.