Alibaba Sells Its Department Store Unit Intime for $1.38 Billion
ALIBABA Group said on Tuesday that it will sell its department store unit Intime to a consortium comprising textiles firm Youngor Fashion and some of Intime’s management for 7.4 billion yuan (S$1.38 billion).
Sell-Off to Focus on Core Operations
The deal comes as Alibaba looks to shift focus from its dominance in China’s retail sector to its core e-commerce and cloud operations.
Impacted by Decline in Chinese Consumer Spending
Alibaba expects to record a loss of about 9.3 billion yuan on its initial investment in Intime. The sale is part of the tech giant’s restructuring efforts, with Intime facing challenges due to a significant decline in Chinese consumer spending post-Covid-19.
Intime Faced Challenges in Market Competition
Intime was valued at around US$4 billion in 2017 when Alibaba acquired the chain, which owns more than 100 stores in China.
Broadening Retail Focus Through Mergers
Alibaba, under former boss Daniel Zhang, expanded its presence in the retail sector by taking over several brick-and-mortar chains, including electronics retailer Suning and hypermarket operator Sun Art Retail.
REUTERS
Conclusion
Alibaba is shifting its focus towards core operations, such as e-commerce and cloud, amid challenges in the Chinese retail sector. The sell-off of Intime reflects this strategy, with Alibaba reporting a loss on its initial investment in the company. The deal marks the beginning of Alibaba’s restructuring efforts and a new direction for its retail business.
FAQs
Q: Why is Alibaba selling Intime?
A: Alibaba is shifting its focus towards core operations, such as e-commerce and cloud, amid challenges in the Chinese retail sector.
Q: How much will Alibaba receive from the sale?
A: The deal includes a payment of 7.4 billion yuan to Alibaba.
Q: Is Alibaba expected to incur any losses from the sale?
A: Yes, Alibaba expects to record a loss of about 9.3 billion yuan on its initial investment in Intime.
Q: Will this impact Alibaba’s presence in the retail sector?
A: The sell-off is part of Alibaba’s restructuring efforts, with a shift towards core operations such as e-commerce and cloud, and a new direction for its retail business.
