China’s Alibaba says to sell department store arm for $1.3 bn loss

China’s Alibaba said Tuesday that it had agreed to sell department store chain Intime at a $1.3 billion loss, as the tech giant trims down its operations with competition intensifying in the country’s cutthroat e-commerce market.

Alibaba said in a statement to the Hong Kong Stock Exchange that Intime would be sold to “a consortium of purchasers comprising Youngor Group and members of Intime’s management team”.

The filing said Alibaba expects to record losses of approximately 9.3 billion yuan ($1.3 billion) as a result of the sale.

Alibaba is a leading player in China’s vast e-commerce sector but the Hangzhou-based firm has faced stiffer competition in recent years as its rivals surge and consumers look to cut costs.

As a result, the company has sought to shore up efficiency, partly by shedding nonessential assets.

Founded by entrepreneur Jack Ma in 1999, Alibaba launched the biggest restructuring in its history last year, splitting the group into six distinct entities.

Last month, it recorded moderate year-on-year revenue growth of five percent in the most recent quarter, falling short of estimates.

“Consistent with our strategy, we continue to invest in our core businesses while enhancing operational efficiency,” said Alibaba’s Chief Financial Officer Toby Xu at the time.

Complicating the outlook for further growth in the domestic market is tougher competition from local rivals including Temu owner PDD Holdings, JD.com and TikTok creator ByteDance.

China’s retail sales growth slowed to three percent year-on-year in November, according to official data released Monday, missing forecasts as demand remains muted in the world’s second-largest economy.

© 2024 AFP