Chinese e-commerce giant Alibaba Group Holding Ltd. has decided to sell its majority stake in Sun Art Retail Group Ltd. to investment fund DCP Capital. The move is further evidence of the company's strategic shift towards strengthening its core focus on online business and technology.
Alibaba $BABA, an e-commerce pioneer in China, said it may raise up to HK$12.3 billion (US$1.6 billion) from the sale of its more than 70% stake in Sun Art, a Costco-like hypermarket chain. However, this amount is significantly lower than the $3.6 billion Alibaba paid to double its stake in Sun Art in 2020. Sun Art's current value is around $3 billion, even though the company's market value has risen more than 80% in the past 12 months.
The sale of this stake accelerates Alibaba's retreat from physical retail, an initiative led by former CEO Daniel Zhang. Under the new leadership of Eddie Wu, Alibaba is focusing on key areas such as cloud technology, online marketplaces and international expansion. For…