Alibaba's Latest Spinoff - What's Going On?

Alibaba Group Holding Limited BABA stock is trading lower Tuesday in line with the broader indexes IShares China Large-Cap ETF FXI and KraneShares Trust KraneShares CSI China Internet ETF KWEB amid concerns over the country's property sector.

Alibaba disclosed its intention to spin off Cainiao by way of a separate listing of the Cainiao Shares on the Hong Kong Stock Exchange.

Cainiao Smart Logistics Network Limited, formerly known as China Smart Logistics Network, is a Chinese logistics company launched by Alibaba Group, jointly with eight other companies in 2013. As of May 2018, Cainiao was one of the largest unicorn companies in China, valued at 100 billion yuan.

Alibaba will continue to hold more than 50% of the shareholdings in Cainiao; therefore, Cainiao will remain a subsidiary of the company. 

Meanwhile, the global e-commerce arena is witnessing a shift towards discount retailing amid China's economic woes and inflation in the U.S. and Europe. 

While significant platforms like Alibaba and JD.com Inc JD report growth, PDD Holdings Inc PDD overshadowed both with a staggering 66% YoY revenue increase.

Economic uncertainty and a sluggish retail rebound post-COVID-19 in China have ignited a "value-for-money battle" on e-commerce platforms.

Consumers from North America to Europe gravitate towards platforms like PDD Holdings' Temu and Bytedance's TikTok Shop, which offer affordable goods from China.

E-commerce giants like Pinduoduo and Shein invest heavily in discounts to capture market share, luring consumers with attractive products. Even Amazon.Com Inc AMZN is gearing up for significant discounting.

Price Action: BABA shares traded lower by 0.44% at $86.84 premarket on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.