(Reuters) -Alibaba Group said on Tuesday it would sell its Chinese department store unit Intime, posting a $1.3 billion loss from the deal, as the retail giant reshuffles its business portfolio to focus on its core e-commerce business. -commerce.
The sale marks a further acceleration in Alibaba’s restructuring, after the group split into six business units last year in its biggest ever overhaul and subsequently announced a series of top management reshuffles.
The company last month first unveiled a plan to integrate its domestic Chinese and international e-commerce platforms into a single business unit led by a single leader, as it faces increasing competition from deep-discount retailers at home and abroad .
Rival platforms such as PDD Holdings’ Pinduoduo and Temu, along with ByteDance’s Douyin and TikTok, have ramped up competition with Alibaba by targeting budget-conscious buyers with rock-bottom prices on everything from headphones to sweaters.
Alibaba said on Tuesday it would sell Intime to a consortium including Youngor Fashion and members of Intime’s management team for 7.4 billion yuan ($1.02 billion), subject to customary regulatory approvals.
Alibaba bought Intime in 2017 in a $2.6 billion deal to expand into the physical retail segment and currently has a 99% stake in the company.
The e-commerce giant is looking to sell a number of consumer sector assets, including Intime, grocery company Freshippo and retailer RT-Mart, to focus on its core businesses, Reuters reported in February.
Alibaba, under former boss Daniel Zhang, had expanded its presence in the retail sector by acquiring several brick-and-mortar chains, including electronics retailer Suning and hypermarket operator Sun Art Retail, which runs RT-Mart.
But China’s challenging consumer environment has put pressure on all retailers and e-commerce platforms.
In April, Alibaba co-founder Jack Ma expressed support for the internet giant’s restructuring efforts and acknowledged past mistakes in a lengthy memo to employees.
($1 = 7.2841 Chinese Yuan Renminbi)
(Reporting by Roushni Nair and Rishav Chatterjee in Bengaluru; Writing by Miyoung Kim; Editing by Vijay Kishore, Sonia Cheema and Jamie Freed)
