Hangzhou Yintai Department Store.
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Alibaba Group Holding Co. is selling its stake in Chinese department store chain Intime Department Store for 7.4 billion yuan ($1 billion) as the company shifts its focus to e-commerce, although the sale will result in a 9.3 billion yuan loss.
The Hangzhou-based giant said a consortium of buyers including Youngor Group, the fashion conglomerate of Chinese billionaire Li Rucheng, will acquire 99% of Intime, as well as an identity, according to a filing with the Hong Kong Stock Exchange on Tuesday. 1% of shares held by unknown minority shareholders. In 2017, Alibaba took the department store chain private in a $2.6 billion deal, led by Shen Guojun, the billionaire founder of Intime Group.
The e-commerce giant co-founded by billionaire Jack Ma embraces the dream of using online technology to upgrade brick-and-mortar retail. For example, it once wanted to generate service fees by selling customer analysis algorithms to offline retailers, and take a commission from their revenue if sales improved. It acquired brick-and-mortar stores to try and diversify the company's revenue streams.
The plan never lived up to expectations, and Alibaba said it would refocus on its core e-commerce business. “Alibaba may continue to sell more assets, and investors may have expected this,” Wang Xiaoyan, a Shanghai-based analyst at research firm 86 Research, said in a message sent via WeChat. “Management's current goal is to focus on pure Internet business and make Alibaba an Internet company again.”
Wang said Alibaba may also sell a controlling stake in RT-Mart, the supermarket chain it acquired for about $3.6 billion in 2020. How to change offline retail.
An Alibaba spokesman said the company had no comment beyond its stock exchange filing.
The e-commerce giant is now hoping to revive growth amid China's economic downturn by offering more value-for-money products and using artificial intelligence technology to help merchants market their products.
Its revenue rose 5% annually to $33.7 billion in the three months to September. Net profit increased 63% year over year to US$6.3 billion, mainly due to changes in the value of the company's equity investments. So far this year, the company's dual-listed shares in New York and Hong Kong are up 15.1% and 11.5% respectively. Co-founder Jack Ma resigned as executive chairman of Alibaba in 2019 and is currently the eighth-largest shareholder in China.th According to Forbes' instant billionaire rankings, he is the richest billionaire with a net worth of $23.7 billion, part of which comes from his stake in Alibaba.
The company, now led by a new management team including CEO Eddie Wu, has repeatedly expressed confidence in its future. During a conference call with analysts in November, Wu was optimistic about the country's stimulus policies and their possible impact. In early December, China's leadership emphasized boosting consumption in its 2025 economic blueprint, but officials have yet to announce policy details. Wang of 86 Research said that as the macro environment improves, Alibaba's growth momentum should accelerate next year, and its cloud computing unit will be the first to resume double-digit growth.
