According to Chinese media outlet Jiemian, Alibaba Group is reportedly contemplating the sale of its retail subsidiary, Intime Retail, as part of a broader strategic reassessment. The tech giant has been in talks with several potential buyers to ascertain their interest in the acquisition. This development signifies a critical pivot for Alibaba as it reevaluates its longstanding “New Retail” strategy amidst restructuring efforts.
Intime Group was a significant component of Alibaba‘s “New Retail” strategy, which aimed to integrate online and offline channels. The strategy was introduced in 2015 under the leadership of then-CEO Daniel Zhang, who spearheaded efforts to explore this new retail model. This initiative led to Alibaba‘s investments and partnerships in various sectors, including consumer electronics, department stores, and online-to-offline (O2O) services. For instance, Alibaba invested in Suning.com in the consumer electronics sector, while Intime Retail, RT-Mart, and Sanjiang Shopping became key players in the department store and supermarket sector. Alibaba also made a substantial investment in the O2O platform, Ele.me, building upon the foundations of Taobao, Tmall, Alibaba Cloud, and Cainiao to construct a comprehensive New Retail ecosystem.
Intime Retail, established in 1998, originated in Hangzhou and gradually expanded from the Zhejiang market to a national level. The company evolved from a single department store format to a shopping center model, eventually developing into a diversified corporate group with operations in commercial retail, commercial real estate development, and equity investment. In April 2014, Alibaba‘s partnership with Intime Retail extended beyond marketing collaborations to include equity investments, with Alibaba Group investing HK$5.37 billion in Intime Retail and establishing a joint venture.
Following its integration into Alibaba, Intime Retail embarked on a comprehensive digital transformation. The company now operates over 100 department stores and shopping centers nationwide, with two main business lines: home delivery and in-store services. With over 35 million digital members, Intime Retail has become an internet department store company that seamlessly integrates online and offline operations on a cloud architecture.
During the privatization of Intime in 2017, Daniel Zhang played a key role and assumed the position of Chairman of Intime Retail, responsible for external communications. Zhang repeatedly stressed Alibaba‘s confidence, clear path, and full commitment to advancing the New Retail strategy. In 2016, Joe Tsai also stated that all of Alibaba‘s investments and mergers were strategically implemented, never driven by financial factors.
At that time, amid rapid global economic growth, the market recognized the value of Alibaba and many other Chinese internet companies. Alibaba‘s stock price soared to record levels in 2016 and 2017, making it the first company in Asia with a market capitalization exceeding $400 billion and placing it among the top tier of global tech companies.
However, the current situation differs significantly from the past. With a downturn in Chinese concept stocks and intense domestic e-commerce competition, Alibaba faces challenges such as slowing core e-commerce revenue and the pains of internal transformation. Last year, Jack Ma outlined three directions for Alibaba: returning to Taobao, returning to users, and returning to the internet. The newly appointed Alibaba Group CEO, Wu Yongming, also stated, “No matter how successful past business models have been, we must turn the page and start anew, awakening the mindset of starting a new venture.”
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