Faced with increased competition and sluggish Chinese consumption, the Alibaba group has decided to refocus on its core business: online commerce. To do this, it sold non-strategic assets, such as its stake in Sun Art Retail, to improve its operational efficiency.
For the Chinese e-commerce giant, Alibaba, the strategy now seems clear: continue development primarily in online commerce. Indeed, faced with increasingly fierce competition, Alibaba has just made the sale of its physical distribution division of the Sun Art Retail group, former subsidiary of Auchan, approximately 74% of its capital to the Chinese investment company DCP Capital. A sale which means a loss estimated between 1.2 billion and 1.5 billion euros.
A disappointing 2024
During 2024, Alibaba launched the largest restructuring in its history, dividing the group into six separate entities and replacing CEO Daniel Zhang. Despite these measures, its growth remains moderate (5% during the second quarter of its staggered fiscal year), in particular due to competition from new players like Temu and sluggish Chinese consumption. Furthermore, growth in retail sales in China slowed in November, to 3% year-on-year, a sign of continued sluggish consumption despite a semblance of recovery in December.
Alibaba is now looking to strengthen its operational efficiency while continuing to invest in its core businesses, but its future remains uncertain in an increasingly complex market.
Source: www.ecommercemag.fr
