Chinese e-commerce giant Alibaba has announced the sale of its 73.66% stake in Sun Art Retail Group, its hypermarket business in China, to the Chinese DCP fund. The sale, valued at 11,383 million yuan (approximately 1,504 million euros), will result in a net loss of 1,741 million euros for Alibaba.
A Shift in Focus
The sale of Sun Art marks a significant shift in Alibaba’s strategy, as the company seeks to monetize non-core assets and focus on its core businesses. This decision is part of Alibaba’s efforts to improve returns for shareholders in an increasingly challenging environment.
Alibaba’s strategy has been impacted by various factors, including the COVID-19 pandemic, China’s economic recovery, growing competition, and conflicts with national regulators. In response, the company has implemented a corporate restructuring process, which includes the merger of its national and international e-commerce divisions into a single subsidiary.
Focus on Core Businesses
Under the direction of its new CEO, Eddie Wu, Alibaba plans to focus on its strategic areas: e-commerce and cloud computing. The company also seeks to expand its international presence as part of its long-term vision.
The sale of Sun Art is part of Alibaba’s efforts to adapt to new market dynamics. While the company faces significant challenges, its renewed focus on key businesses could lay the foundation for sustained growth in the future, both in China and around the world.