Alibaba Plans to Sell Off Grocery and Retail Assets, Doubles Down on E-Commerce Core

Alibaba Group Holding Limited BABA is exploring the sale of several consumer sector assets, including its grocery business Freshippo and retailer RT-Mart, according to familiar sources. 

This decision aligns with Alibaba’s strategic pivot under chairman Joe Tsai and CEO Eddie Wu towards focusing on its core e-commerce operations and shedding non-essential, unprofitable units. 

In 2023, Alibaba shelved the potential Hong Kong initial public offering (IPO) of Freshippo due to subdued investor sentiment in the consumer stocks sector. 

Alibaba had revised its valuation expectations for Freshippo to $4 billion in the listing, down from its earlier estimates of $6 billion to $10 billion.

Although discussions with potential buyers are in the preliminary stages, the intention to divest signals a significant shift in Alibaba’s business strategy, Reuters reports.

This move is part of a broader restructuring within Alibaba and comes amidst increased regulatory scrutiny in China. 

Also this week, reports indicated Alibaba is weighing the sale of the InTime department store branch, marking a strategic pivot away from blending physical and digital retail markets.

Eddie Wu’s leadership has marked a transition towards granting Alibaba’s business units more market independence and rigorously defining core versus non-core activities. 

The company’s refocus on domestic e-commerce, alongside ambitions in AI, cloud computing, and international expansion, necessitates divesting from offline ventures that have struggled to integrate with Alibaba’s primary online commerce model. 

In March, Alibaba announced its intention to split into six units, seeking fundraising or listings for most of them. 

Price Action: BABA shares are trading lower by 1.69% at $71.23 on the last check Friday.

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