Alibaba’s Strategic Shift: E-Commerce Focus and Retail Asset Sale – Alibaba Gr Holding (NYSE:BABA) Alibaba’s Strategic Shift: E-Commerce Focus and Retail Asset Sale

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By Ronald Tech

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

The decision aligns with Alibaba’s strategic shift under chairman Joe Tsai and CEO Eddie Wu, who are doubling down on the company’s core e-commerce operations while divesting non-essential and unprofitable units. 

In a significant move, Alibaba shelved the prospective Hong Kong initial public offering (IPO) of Freshippo in 2023 due to subdued investor sentiment in the consumer stocks sector. The company had to revise its valuation expectations for Freshippo down to $4 billion from the initial estimates of $6 billion to $10 billion.

While discussions with potential buyers are in the early stages, the intention to divest represents a major shift in Alibaba’s business strategy, as reported by Reuters.

This move is part of a broader restructuring within Alibaba and is taking place amid increased regulatory scrutiny in China. 

Recent reports also suggest that Alibaba is considering the sale of the InTime department store branch, indicating a strategic pivot away from integrating physical and digital retail markets.

Under Eddie Wu’s leadership, Alibaba has been transitioning toward giving its business units more market independence and actively defining core versus non-core activities. 

The company’s renewed focus on domestic e-commerce, coupled with its 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. 

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In a significant step, Alibaba announced its intention to split into six units in March, with plans to seek fundraising or listings for most of them. 

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

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