In a move that will see the company incur a $1.3 billion loss, Alibaba Group has announced the sale of its Chinese department store unit, Intime. The decision comes as Alibaba seeks to refocus on its core e-commerce business amid rising competition from platforms such as Pinduoduo, Temu, and Douyin.
The sale comes after a major restructuring last year when Alibaba split into six business units and reshuffled top management. Alibaba had acquired Intime in 2017 for $2.6 billion Alibaba intends to sell Intime to a consortium comprising Youngor Fashion and members of Intime's management team.
The deal, which is subject to regulatory approvals, is valued at 7.4 billion yuan ($1.02 billion).
Alibaba had acquired Intime in 2017 for $2.6 billion as part of its expansion into brick-and-mortar retail and currently holds a 99% stake in the business. Alibaba's divestment from consumer sector assets Alibaba has been eyeing the sale of some of its consumer sector assets, including Intime, grocery business Freshippo, and retailer RT-Mart.
Back in February, Alibaba Chairman Joe Tsai had said that while it made sense to exit these businesses given the challenging market conditions, the process would take time. This move is part of a broader shift away from physical retail toward e-commerce. Challenges of Alibaba's 'New Retail' model Under former CEO Daniel Zhang, Alibaba ventured into retail by acquiring chains like Suning and Sun Art Retail, which owns RT-Mart.
The "New Retail" model introdu.
