Alibaba To Sell Suning Stake at Huge Loss: Strategic Shift or Financial Misstep?

Alibaba Group Holding Limited’s BABA Taobao China Software looks to divest its 20% share in Suning.com, a prominent Chinese retailer, to another Alibaba affiliate, Hangzhou Haoyue Enterprise Management, for 2.8 billion yuan ($389 million). 

This sale marks a significant loss for Alibaba, as the stake’s valuation drastically falls from the $4.6 billion paid in 2015, translating to an approximate 90% reduction in value, Reuters reports.

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The transaction is part of a broader pattern observed in December, where Alibaba shifted shares from at least seven listed entities, including YTO Express and Focus Media, to Hangzhou Haoyue Enterprise Management, established in October. 

This move aligns with Alibaba’s ongoing major restructuring, the largest since its inception 24 years ago, with the company expressing intentions earlier this month to offload some of its conventional physical retail ventures. 

Recently, Taobao launched a live commerce company under Taobao Live to tap the popularity it gained during events like the Singles’ Day festival, boosting its gross merchandise value (GMV).

Alibaba is also focusing on its overseas business. Its international e-commerce business unit, comprising AliExpress, Lazada, Daraz, and 

Trendyol, reported a 44% revenue growth to $4 billion in the December quarter versus the modest performance of its core e-commerce businesses, Taobao and Tmall Group. 

Price Action: BABA shares traded higher by 0.28% at $76.33 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.

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