- With this acquisition, Alibaba wants to digitize physical retail to offset the slowing growth in online sales.
- Intime Retail operates 29 department stores and 17 shopping malls in China.
The Chinese e-commerce giant Ali Baba is in the process of redeeming Intimate Retail, which manages numerous shopping centers and supermarkets in China. Alibaba’s offer could reach up to $ 2.6 billion to acquire the Chinese distributor. In March 2014, the Chinese e-merchant took a 35% stake in Intime Retail for $ 692 million.
Founded in 1998, Intime Retail operates 29 department stores and 17 shopping centers in China. These could allow Alibaba to offer brands a physical presence or to make them withdrawal points for online purchases. At the same time, Intime Retail could use the data collected by Alibaba to refine its collections according to the trends that emerge among online shopping.
A digitalization strategy for physical stores
With this acquisition, Alibaba wants to digitize physical retail to offset the slowing growth in online sales. By 2015, the Chinese giant had invested 4.6 billion dollars in the distribution group Suning Commerce Group.
Beyond its strategy of numbering physical stores, the takeover of Intimate Retail allows Alibaba to strengthen itself against competition from Tencent, which publishes the instant messaging application WeChat, which has more than 800 million users. in China. Transformed into a service platform, it has engaged in online commerce, in particular by allowing its users to buy plane tickets or order meals from the application interface.
Between July and September 2016, Alibaba reported revenue of $ 5.14 billion, up 55%. However, the Chinese e-merchant saw its net profit drop 66% year-on-year to $ 1.14 billion.