Alibaba Group said on Tuesday it would sell its Chinese department store unit Intime and book a $1.3 billion loss from the deal, as the retail giant reshuffles its business portfolio to focus on its core e-commerce operation.
The sale marks a further acceleration in Alibaba’s restructuring after the group split into six business units last year in its biggest-ever revamp and announced a series of top management reshuffles afterwards.
The company last month unveiled a plan to integrate its domestic Chinese and international e-commerce platforms into a single business unit run by one leader for the first time as it faces growing competition from discount-heavy retailers at home and abroad.
Rival platforms such as PDD Holdings’ Pinduoduo and Temu, along with ByteDance’s Douyin and TikTok, have stepped up competition with Alibaba by targeting cost-conscious shoppers with rock-bottom prices on everything from headphones to sweaters.
Alibaba said on Tuesday it would sell Intime to a consortium comprising Youngor Fashion and members of Intime’s management team for 7.4 billion yuan ($1.02 billion), subject to customary regulatory approvals.
Alibaba purchased Intime in 2017 in a $2.6 billion deal to expand into the bricks-and-mortar retail segment and currently holds a 99% stake in the business.
The e-commerce giant has been looking to sell a number of consumer sector assets, including Intime, grocery business Freshippo and retailer RT-Mart to focus on its core business, Reuters reported in February.
Alibaba, under former boss Daniel Zhang, had 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, which runs RT-Mart.
But China’s challenging consumer environment has put pressure on all retailers and e-commerce platforms.
In April, Alibaba co-founder Jack Ma expressed support for the internet giant’s restructuring efforts, and acknowledged past mistakes in a lengthy memo to employees.
Reuters
