Alibaba Group is selling its Chinese department store unit Intime as part of its efforts to focus on its core e-commerce operation. The company has agreed to sell Intime to a consortium comprising Youngor Fashion and members of the management team for 7.4 billion yuan ($1.02 billion). This move marks the latest step in Alibaba’s restructuring efforts, which began after it split into six business units last year.
The sale comes as Alibaba faces growing competition from discount-heavy retailers both at home and abroad. Rival platforms such as Pinduoduo and TikTok have stepped up competition by targeting cost-conscious shoppers with rock-bottom prices on everything from headphones to sweaters.
Alibaba’s decision to focus on its core business has been driven by China’s challenging consumer environment, which has put pressure on all retailers and e-commerce platforms. The company had previously expanded into the bricks-and-mortar retail segment in 2017, but it now plans to prioritize its e-commerce operation.
The sale of Intime is not an isolated incident, as Alibaba has also been looking to sell other consumer sector assets, including Freshippo and RT-Mart. The company’s chairman, Joe Tsai, had previously stated that exiting these businesses would make sense, but challenging market conditions have made it a slower process.
Alibaba’s efforts to refocus its business on its core e-commerce operation come as the “New Retail” model, which combines e-commerce and brick-and-mortar retailing, faces challenges. The model was once seen as a key part of Alibaba’s strategy, but it has been criticized for higher rents and labour costs than pure e-commerce.
Source: https://finance.yahoo.com/news/alibaba-sell-mall-chain-1-042546498.html