Alibaba is selling its stake in Sun Art to DCP Capital for $1.6 billion, focusing on its core online business amid rising competition.
Beijing: Alibaba is making some big moves lately. They’ve decided to sell their shares in Sun Art Retail Group to DCP Capital for a cool $1.6 billion. This is part of their plan to focus more on online business and step back from physical retail.
So, here’s the scoop: Alibaba is unloading over 70% of its stake in Sun Art, which runs those Costco-like hypermarkets. They paid $3.6 billion just a couple of years ago to boost their stake, so this sale is a bit of a hit for them. Sun Art’s value has jumped over 80% in the last year, but it’s still worth around $3 billion now.
This move is all about Alibaba trying to get back to its roots. With new CEO Eddie Wu at the helm, they’re shifting focus to areas like cloud services and online marketplaces. They’re also looking to expand internationally, like in Korea, while selling off parts of the business that don’t fit their new strategy.
They’ve been thinking about selling Sun Art for a while, and it seems like DCP Capital was a good fit. Alibaba sees this as a chance to cash in on non-core assets and use that money to boost their main business and give back to shareholders.
Analysts are saying this sale reflects Alibaba’s commitment to focusing on tech-driven platforms and global e-commerce. They’re also looking to fund share buybacks and dividends with the proceeds from this sale. Just last month, they sold another part of their business, the Intime department store chain, for about $1 billion, which also came with a loss.
Sun Art operates hundreds of hypermarkets across China, and it’s been a significant part of Alibaba’s strategy in the retail space. But with the competition heating up, it looks like they’re ready to streamline and concentrate on what they do best.
