Alibaba Considers Selling Intime Retail in Strategic Shift

Feb 01, 2024, 22:45pm2024/02/01 22:45:23 Pandaily

According to Chinese media outlet Jiemian, Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> 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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> as it reevaluates its longstanding “New Retail” strategy amidst restructuring efforts.

Intime Group was a significant component of Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s investments and partnerships in various sectors, including consumer electronics, department stores, and online-to-offline (O2O) services. For instance, Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> 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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> also made a substantial investment in the O2O platform, Ele.me, building upon the foundations of Taobao, Tmall, Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> 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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s partnership with Intime Retail extended beyond marketing collaborations to include equity investments, with Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> Group investing HK$5.37 billion in Intime Retail and establishing a joint venture.

Following its integration into Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />, 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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘s confidence, clear path, and full commitment to advancing the New Retail strategy. In 2016, Joe Tsai also stated that all of Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> and many other Chinese internet companies. Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />‘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<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> faces challenges such as slowing core e-commerce revenue and the pains of internal transformation. Last year, Jack Ma outlined three directions for Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder />: returning to Taobao, returning to users, and returning to the internet. The newly appointed Alibaba<img decoding="async" class="trade-card__loading" layout="fixed" height="50" width="50" src="https://assets.pandaily.com/uploads/2021/12/loading.png" placeholder /> 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.”