Alibaba to sell Intime department store chain at $1.3B loss
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 introduced by co-founder Jack Ma sought to merge e-commerce with physical stores but proved costlier than pure e-commerce models due to rents and labor costs. The sale of Intime marks a major departure from this strategy.
