Alibaba Group Holding Ltd. (BABA, Financial) has announced plans to divest its entire stake in Intime Retail, a Chinese department store chain, resulting in an anticipated loss of approximately $1.3 billion. Youngor Group and the members of Intime's management team are leading a consortium in the sale, valued at around 7.4 billion yuan.
In 2017, Alibaba bought a controlling stake in Intime for around $2.6 billion to tie the closing gap between the online and offline retail worlds. But it now competes with homegrown rivals Pinduoduo, JD.com and ByteDance's Douyin, seeking market share in China's crowded e-commerce marketplace.
In March 2023, Alibaba (BABA, Financial) completed a big reshuffle, separating its business into six unevenly run entities to improve agility and leaner general operations. With its divestment of Intime, the company is following a strategy to eliminate non-core assets and concentrate on primary business areas.
After the announcement, Alibaba's Hong Kong-listed shares fell 2%, and Youngor's Shanghai-listed shares gained 3.7%. China's retail sector is facing a challenging period. Consumer spending growth is slumping, and the rising popularity of price-sensitive platforms is eating into market share.
