(CTN News) – Alibaba Group is considering selling several brick-and-mortar businesses, including Freshippo grocery business, retailer RT-Mart, and shopping mall operator Intime.
As Reuters reported on Friday (Feb. 2), citing unnamed sources, Alibaba is focusing on its core eCommerce business model and divesting non-core, non-profitable divisions.
In response to PYMNTS’ request for comment, Alibaba Group did not immediately respond.
According to the report, Alibaba has been in discussions with strategic and financial investors regarding the sale of these assets, although it is still unclear whether the sale will be completed.
This move is part of Alibaba’s broader restructuring efforts and has been influenced by China’s increased scrutiny of initial public offerings, according to the report. As a result of the challenging capital markets, startups have had difficulty raising capital.
According to a report, Alibaba’s CEO Eddie Wu announced two months after he assumed the position that the company would evaluate its businesses and determine which are “core” and which are “non-core.”
According to Jason Yu, greater China managing director for market research firm Kantar Worldpanel, the company has increased its focus on domestic e-commerce, artificial intelligence, cloud computing, and overseas expansion since changing management.
Freshippo, also known as Hema, provides groceries, dine-in services, and 30-minute home delivery. The company intends to raise funds at a valuation of approximately $4 billion in 2022, but has not yet announced that the campaign is complete. Freshippo has over 300 stores in 28 cities in China.
RT-Mart operator Sun Art Retail Group acquired a controlling stake in Alibaba for $3.6 billion in 2020, according to the report. The expansion into the brick-and-mortar retail sector of China, however, has not resulted in a profit.
Alibaba Group announced in November that it would not spin off its cloud intelligence business. A U.S. government restriction on cloud and artificial intelligence technology imports to China appears to have led to that decision.
Considering the uncertainties in the current environment, we have decided not to pursue a full spin-off of Cloud Intelligence Group,” Wu said when announcing the company’s quarterly earnings Nov. 16.