21st Century Business Herald reporter Dong Jingyi reports from Shanghai
On February 7th, Alibaba Group announced its performance for the third quarter of the 2024 fiscal year. At the financial report meeting, Alibaba Group Chairman Cai Chongxin responded that in the nine months from fiscal year 2024 to present, Alibaba has completed the exit of $1.7 billion in non core assets and has established a dedicated team to execute the exit of some listed company stocks.
Cai Chongxin said that there are still some traditional physical retail businesses on the balance sheet, "which are not our core focus. If we can complete the exit, it is also very reasonable." However, he also said that considering the current market situation, the exit will take time to slowly achieve.
Previously, it was reported that Alibaba Group is seeking to sell its assets such as RT Mart and Intime in order to divest non core departments that are in losses, shift the company's development focus to the "core profitable part" of e-commerce, optimize resource allocation, and focus on core businesses.
RT Mart was once the dominant player in the supermarket industry. In 2017, Alibaba announced that it would invest approximately HKD 22.4 billion in Gaoxin Retail in an attempt to integrate traditional retail in the e-commerce wave. But since 2014, the entire business of RT Mart has been in a declining state, and Alibaba's entry has not completely reversed this situation. In the first three quarters of 2023, Gaoxin Retail's loss reached 378 million yuan.
The acquisition of Intime is one of the iconic acquisition deals of former CEO Zhang Yong. As early as 2014, Alibaba announced a strategic investment of HKD 5.37 billion in Intime Commercial. In 2017, Alibaba privatized Intime Commercial, increasing its investment shareholding to 73.79%. Intime Commercial has become an important force in Alibaba's offline operations and an important component of Alibaba's "new retail" strategy.
Since Alibaba proposed the "New Retail" strategy in 2015, Zhang Yong has repeatedly emphasized leading the transformation of new retail, stating that Alibaba has "sufficient confidence" and "clear path" in promoting the new retail strategy. In the past, Alibaba quickly entered the offline retail market through acquisitions and investments, integrated and transformed the operational models of these enterprises, and created new value for consumers.
However, at present, with the closure of Carrefour, Wal Mart and other established supermarkets, the retail industry as a whole is facing a cold winter cycle of structural transformation. The "Development Index of Large Retail Enterprises" released by the China Department Store Business Association for the third quarter of 2023 shows that the operating income index of large retail enterprises is 1385 points, a year-on-year decrease of 10.5% and a month on month decrease of 1.0%, indicating a continuous downward trend. The operating income index of large department store retail enterprises was 1242 points, a decrease of 0.5% month on month and 4.5% year-on-year, and a decrease from the second quarter.
At present, Alibaba is focusing on the development of core business and cloud services. Wu Yongming once stressed that Alibaba will focus on three directions in the future: technology driven Internet platform business, AI driven technology business, and global business network.
Wu Yongming has stated that for core businesses, we will maintain long-term focus and high-intensity investment to ensure that our products always keep up with user needs and iteratively evolve, maintaining long-term vitality and competitiveness; For non core businesses, asset value will be realized as soon as possible through various capitalization methods.