Alibaba to Divest from Brick-and-Mortar Ventures, Refocusing on E-Commerce

In a strategic shift, Alibaba plans to sell its grocery and retail assets, including Freshippo and RT-Mart, to concentrate on its core e-commerce and technology operations.

• Alibaba Group is exploring the sale of its consumer sector assets, such as the grocery business Freshippo and retailer RT-Mart, as part of a broader business strategy realignment.
• The move is driven by a focus on Alibaba’s core e-commerce operations and shedding non-essential, unprofitable units amidst increased regulatory scrutiny in China.
• Eddie Wu, Alibaba’s CEO, emphasizes the company’s shift towards granting more market independence to its business units and focusing on domestic e-commerce, AI, cloud computing, and international expansion.
• The decision to divest comes after Alibaba shelved the potential Hong Kong IPO of Freshippo due to subdued investor sentiment and revised its valuation expectations for Freshippo to $4 billion, down from earlier estimates of $6 billion to $10 billion.
• Alibaba announced its intention to split into six units in March, seeking fundraising or listings for most of them, marking a significant restructuring within the company.

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