Alibaba separates from Intime: A strategic withdrawal in retail

The Chinese e-commerce giant Alibaba has announced a complete divestment of its stake in the retail chain Intime Retail. This move is expected to result in a loss of about 1.3 billion USD. A consortium led by Youngor Group, along with members of Intime management, will take over the purchase, valued at approximately 7.4 billion yuan. Alibaba acquired a majority stake in Intime in 2017 to bridge the gap between online and offline retail. However, the company now finds itself in an increasingly competitive market environment with domestic competitors like Pinduoduo, JD.com, and Bytedance’s Douyin also vying for market share. Already in March 2023, Alibaba underwent a comprehensive restructuring, dividing its business into six independent units to enhance operational efficiency. By divesting Intime, Alibaba is specifically focusing on its core competencies and selling off non-essential assets. The announcement of the sale had an immediate impact on stock prices. While the Hong Kong-listed Alibaba shares fell by 2%, the Shanghai-listed shares of Youngor rose by 3.7%. Meanwhile, the retail sector in China is facing challenges as consumer spending growth weakens and cost-conscious platforms increasingly gain market share.