‘Alibaba considers sale of consumer sector assets’
● Chinese internet giant Alibaba Group is looking to sell a number of consumer sector assets, including grocery business Freshippo and retailer RT-Mart, three sources with knowledge of the situation said.
The sale plan comes as Alibaba, under chair Joe Tsai and newly appointed CEO Eddie Wu, has shifted focus back to its core profitable e-commerce business model while divesting non-core, loss-making units.
Alibaba has been in talks with strategic and financial investors about these assets, said the sources, who declined to be named as the discussions were confidential. The assets also include shopping mall operator InTime. Discussions are at an early stage and Alibaba may decide not to proceed.
Bloomberg reported on Thursday that Alibaba is considering selling InTime and has reached out to several firms to gauge their interest in acquiring its department store arm.
Alibaba, RT-Mart and Intime did not immediately respond to requests for comment.
A spokesperson for Freshippo denied that Alibaba was planning to sell the company and declined to comment further. The divestment efforts come amid Alibaba’s broad restructuring and China’s tightened scrutiny over initial public offerings in already challenging capital markets that have hampered start-ups’ ability to raise funds.
Wu, who took office after predecessor Daniel Zhang stepped down in September, set out the company’s future strategy two months later, saying that each of its businesses would face the market more independently and that it would conduct a strategic review to distinguish between “core” and “non-core” businesses.
“With the change of Alibaba management, they are more focused on their core business, which is obviously domestic ecommerce, and they want to invest in more AI, cloud computing, and also overseas expansion,” said Jason Yu, greater China MD of market research firm Kantar Worldpanel.
“These offline businesses do require a huge amount of effort and resources and it’s proven quite difficult to actually integrate with their core business, which is the online commerce business,” he said.
Alibaba expanded in China’s brick and mortar retail sector as growth in e-commerce slowed, but that strategy has not translated into profits, analysts said.