Alibaba, the Chinese e-commerce giant, is reportedly set to sell its retail business Yintai Department Store this week, shifting its focus back to its core e-commerce operations.
According to sources cited by the Hong Kong-based South China Morning Post on Monday, Alibaba is planning to sell Yintai Department Store to the leading textile and apparel industry giant Shandong Ruyi Group.
Insiders revealed that the two sides are expected to hold a press conference this week to announce the merger.
Both Alibaba and Shandong Ruyi Group have not responded to media requests for comments.
Established in 1998, Yintai Department Store is an online department store ranking among the top players in China’s retail industry. In 2014, Alibaba invested HK$5.3 billion to become the second largest shareholder of Yintai. In 2017, Alibaba, in conjunction with a wholly-owned subsidiary, initiated the privatization of Yintai for HK$19.8 billion and became the controlling shareholder, raising its stake to about 74%.
The department store industry exemplified by Yintai Department Store is experiencing a noticeable downward trend, facing difficulties such as store closures, reducing store sizes, and transforming from offline to online operations.
It is reported that Alibaba is also considering divesting its shares in the supermarket chain Sun Art Retail Group. Sun Art Retail Group is the parent company of RT-Mart, of which Alibaba acquired control for HK$28 billion from the French Mulliez family in 2020.
Sun Art Retail halted its stock trading in Hong Kong from late September to mid-October, citing ongoing negotiations.
On Monday, Alibaba’s stock price on the Hong Kong Stock Exchange fell by 1.6% to HK$84.3, while Shandong Ruyi Group’s stock price on the Shanghai Stock Exchange rose by 5.7%.