Jack Ma gave up, and Ali wanted to sell Intime Department Store
Alibaba is considering selling Intime Department Store
There was no turning back from the bow, and Ali's reform and adjustment expanded the scope again.
Following the transformation of Taotian and Alibaba Cloud, this time Ali extended its hand of adjustment to the new retail field.
Recently, it was reported that Alibaba Group is considering selling its department store and shopping mall operator Yintai Retail, and Alibaba has been in contact with several companies to assess their interest in acquiring Yintai. As of press time, the two sides have not responded to this.
Yintai Shopping Center
In fact, rumors about this sale are not groundless.
As early as 2023, when Tsai Chongxin succeeded Daniel Zhang as the head of Alibaba, it was reported that Ali had begun negotiations on the sale of Yintai. In the past month, Alibaba has also held relevant talks with potential buyers.
By all indications, Alibaba's sale of Yintai seems to have become a default choice.
Notably, in 2017, the going-private deal led by Alibaba resulted in a valuation of about US$4 billion for Yintai. At present, Yintai has more than 100 stores and shopping malls in China, and still has a significant influence on the entire physical retail market.
If the sale of Yintai is successfully completed, Alibaba will receive a significant amount of income. However, due to the rapidly changing market environment, it remains to be seen whether Yintai will still be able to arouse sufficient interest from potential buyers, and the outcome of the sale remains unclear.
However, regardless of whether Alibaba ultimately completes the sale of Yintai or not, it is clear that its ambitions and strategic layout in the new retail field will not change.
For Alibaba, the main motivation for the sale of Yintai is to integrate business resources and optimize the new retail structure, so as to better lay out the new retail strategy to cope with market changes and future challenges.
The important thing is not the result, but the process of re-examining and reconsidering Ali's "new retail" strategy for many years in the context of spin-off and reorganization, which means that Ali's reform has gradually penetrated into the new retail track, and it is likely to carry out more bold actions in this field in the future.
From an industry perspective, Alibaba's sale of Yintai is an important step for Alibaba to devote more resources and energy to the integrated development of online and offline.
With the continuous deepening of Alibaba's transformation, the Group's new retail business has officially entered a new cycle of change. In the future, Alibaba may focus more on the innovation and transformation of the new retail business and continue to lead the development of the industry.
Why did Alibaba sell Yintai?
Looking back at the history of cooperation between Alibaba and Yintai, we can find that the cooperation between the two parties began in 2013.
In May 2013, Yintai Retail, as a well-known department store chain in China, operated department stores and shopping malls in China's first- and second-tier cities, such as Hangzhou.
At that time, Alibaba, as the most profitable Internet company in China, had already made remarkable achievements in the online market. With the continuous expansion of its business, Alibaba decided to enter the offline field and chose to cooperate with Yintai Group.
At the beginning of the cooperation, the two parties jointly devoted themselves to the "China Intelligent Logistics Backbone Network" project, which is now known as the Cainiao Network. At that time, Yintai Group invested 1.6 billion yuan and held 32% of the shares of Cainiao Network, making it its second largest shareholder.
This cooperation not only marks the in-depth cooperation between the two parties in the field of logistics, but also symbolizes an important step for Alibaba to enter the offline market.
Through this move, Alibaba began to expand its business to a wider range of fields, and continued to explore new business models and opportunities with Yintai Group.
In October of the same year, Alibaba announced a strategic cooperation with Yintai to jointly explore the integration of online and offline (O2O). During this period, Yintai participated in Tmall's "Double 11" campaign, supporting the promotion with the resources of its 35 offline physical stores.
2023 Singles' Day pre-order event Source: Intime Department Store
Since 2014, the cooperation between Alibaba and Yintai has become increasingly close.
Ali first became the second largest shareholder after Yintai founder Shen Guojun by taking a stake in Intime Department Store; then in 2015, Alibaba further increased its stake in Yintai shares and was promoted to the largest shareholder, with Daniel Zhang as CEO; in 2016, Yintai Commercial Group announced that it had accepted Alibaba's share swap notice, after which Alibaba's total shareholding in Yintai will reach 27.90%, officially becoming the largest shareholder of Yintai Retail.
Shen Guojun, founder of Yintai
Finally, in 2017, Alibaba completed the privatization of Yintai for 17.7 billion yuan. In this acquisition, Jack Ma gave Yintai a very high premium, which made Yintai fully integrated into Alibaba's system and became an important part of Alibaba's new retail field.
In Daniel Zhang's words, "Alibaba is very clear about Yintai Retail's positioning, and it will be a major ship in the Alibaba Group's fleet, undertaking the mission of transforming and upgrading online and offline retail department stores." ”
With this idea in mind, in 2019 Ali came up with an ambitious goal: to build another Intime department store in the next five years.
It's just a pity that the market changes are always unexpected.
With the rise of low-cost consumption, Yintai, which is mainly distributed in first- and second-tier cities in China, is no longer as favored by consumers as it was in the past, so Alibaba has to find another way.
Since then, Alibaba has gradually taken Hema as the main format of its new retail, in order to further expand its influence in the field of new retail and continuously expand the territory of new retail.
However, due to the misjudgment of the market in the past, Ali missed the opportunity to sink the market, and the new retail business is also facing huge challenges.
In addition to the sale of Yintai, Hema, as the representative of Alibaba's new retail business, has also been rumored to be sold. In addition, Freshippo's IPO plan has been suspended, and its overall business is still in the red.
Timeline of Hema format experiment Source: New consumption of watching the tide
These news have undoubtedly exacerbated the market's concerns about the prospects of Alibaba's new retail business, and its new retail anxiety has continued to be exposed to the public.
All kinds of challenges and pressures show that Alibaba's exploration in the new retail field is not all smooth sailing. Although Alibaba's original intention was to promote business growth and transformation through the new retail strategy, the difficulties and challenges in reality made the process more complex and arduous than expected.
Perhaps it is based on this consideration that Alibaba will choose to sell Yintai and focus on integrating resources and optimizing business structure in the new retail layout, striving to achieve greater breakthroughs and development in the new retail field.
The development of new retail has become unstoppable
As we all know, there have always been great limitations in the traditional retail business, which are mainly manifested in the following aspects:
First of all, because traditional retail relies on physical stores, its consumer audience is often limited to a specific geographical area, and it is difficult to achieve cross-regional expansion and coverage.
Secondly, inventory management is also a major challenge for traditional retail, which requires a lot of manpower and material resources to take inventory and monitor to ensure the timeliness and accuracy of product supply.
In addition, traditional retail needs to invest a lot of manpower, material resources and capital in the operation process, and will face economic pressures such as high rent and high labor costs.
From the perspective of the industry, the limitations of the traditional retail model are quite prominent, and it has been unable to adapt to the pace of development of the times. These limitations will not only limit the expansion and reach of traditional retail businesses, but also make them overstretched in response to market changes and consumer demand.
In contrast, the new retail model often relies on advanced technology and innovative business models, which are more suitable for the needs of the development of the times. At present, this model is changing the rules of the game for the entire retail market through the integration of online and offline.
As Ma Yun said, the era of pure e-commerce will soon become a thing of the past, and the future belongs to the era of new retail. The development of new retail has become unstoppable, and e-commerce platforms such as Alibaba and JD.com have invariably begun to deepen their layout, committed to occupying a place in this market.
Taking JD.com as an example, JD.com's new retail actions have become more and more frequent, from the omni-channel launch of "JD New Department Store" to the integration of Seven Fresh, JD Pinpin and other businesses to establish an innovative retail department.
Source: Jingdong App
At present, it seems that whether it is Alibaba, JD.com or other e-commerce platforms, they are constantly exploring and trying new retail business, striving to occupy a favorable position in the market, bringing more opportunities and possibilities for the development of the entire retail industry.
In the new retail market, the only constant is change. Only by actively supporting and constantly changing and innovating can Ali completely open the door to the future of new retail.
Author | Li Xiang