Alibaba Group announced on Tuesday that it will sell its Chinese department store unit, Intime, at a loss of $1.3 billion as part of the company’s ongoing efforts to restructure and refocus on its core e-commerce operations.
The sale represents a significant step in Alibaba’s broader restructuring strategy, which gained momentum last year when the company split into six separate business units. This was followed by a series of high-level management changes aimed at improving efficiency and profitability.
In a bid to streamline its operations, Alibaba unveiled plans last month to merge its domestic Chinese and international e-commerce platforms into a single unit, which will be led by one executive. This restructuring comes as Alibaba faces increasing pressure from discount-heavy competitors, both in China and abroad.
Rival platforms like Pinduoduo (PDD) and Temu, as well as ByteDance’s Douyin and TikTok, have aggressively targeted cost-conscious consumers by offering products at significantly lower prices, which has intensified competition in the retail and e-commerce sectors.
Under the terms of the sale, Alibaba will sell Intime to a consortium led by Youngor Fashion, along with members of Intime’s management team, for 7.4 billion yuan (approximately $1.02 billion). The deal is subject to regulatory approvals.
Alibaba acquired Intime in 2017 for $2.6 billion in a bid to expand into the brick-and-mortar retail space. The company currently holds a 99% stake in Intime, which operates a network of department stores across China.
This move is part of a broader strategy to divest from non-core assets, including the sale of Intime, the grocery chain Freshippo, and the retail chain RT-Mart. Alibaba’s focus remains on its e-commerce business, where it faces heightened competition from a variety of domestic and international players.
The company, under former CEO Daniel Zhang, expanded its presence in physical retail through acquisitions, including the purchase of electronics retailer Suning and hypermarket chain Sun Art Retail, which operates RT-Mart. However, China’s sluggish consumer environment and rising competition have put considerable pressure on traditional retailers and e-commerce platforms alike.
In a memo to employees earlier this year, Alibaba co-founder Jack Ma expressed support for the company’s restructuring efforts, admitting to past mistakes and emphasizing the need for change as Alibaba moves forward with its new strategy.
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