China’s Alibaba to Buy Intime Retail for $2.6b
China’s Alibaba to Buy Intime Retail for $2.6b

China’s Alibaba to Buy Intime Retail for $2.6b

China’s Alibaba to Buy Intime Retail for $2.6b

China’s Alibaba Group is leading a $2.6 billion bid to privatize Intime Retail Group Co Ltd in a move to digitize bricks-and-mortar department stores while growth in online sales begins to slow.
Alibaba Investment Ltd and Intime founder Shen Guojun have offered HK$10 ($1.29) per Intime share - 42.25% over the HK$7.03 price when trading stopped on December 28 pending an announcement. The stock surged as much as 38% when trading resumed on Tuesday to its highest price since July 2015.
The offer comes as the government works on a broad internet sector strategy combining online and offline industries, encouraging technology-driven, high-value economic output to help arrest a slowdown in the world’s second-largest economy.
That slowdown is filtering through to transaction volumes on Alibaba’s online shopping platforms where sales growth has decelerated in recent quarters, prompting the e-commerce firm to expand into other areas such as online video and local services.
In 2015, it invested $4.6 billion in electronics retailer Suning Commerce Group Co Ltd, its biggest step to integrate online and offline shopping.
“(Alibaba) is looking for ways to better leverage the technology it has,” said Shanghai-based retail analyst Ben Cavender at China Market Research Group.
“It’s always looking for new models and new ways to drive growth, and it has obviously seen a slowdown in online sales... The advantage Alibaba has over a lot of brick-and mortar retailers is that it has probably better customer data than just about anybody else.”
Alibaba grew into China’s largest e-commerce retailer with its Taobao and Tmall platforms. In 2014 it invested $692.25 million into Intime and now owns 27.82 percent, with Shen holding 9.17%. The pair plan to buy the rest of Intime using internal cash resources and external debt financing.
Intime operates 29 department stores and 17 shopping malls in China, mainly in so-called first- and second-tier cities. Its profit fell 21.3% in the first-half of 2016, saying e-commerce had transformed the competitive landscape.
Those malls could allow Alibaba to give brands a physical presence or act as collection points for online shoppers, Cavender said. In turn, department stores could use Alibaba’s data on popular clothes or colors to choose brands or styles.
Intime in a statement said Alibaba and Shen planned to explore development opportunities and implement a series of long-term growth strategies, which could affect its short-term growth.
“We don’t divide the world into real or virtual economies, only the old and the new,” said Alibaba Group Chief Executive Officer Daniel Zhang in a separate statement. “Those who cling on to the old ways of retailing will be disrupted.”
Separately, Executive Chairman Jack Ma met US President-elect Donald Trump on Monday, laying out Alibaba’s plan to bring a million small US businesses onto its e-commerce platforms to sell to Chinese consumers over the next five years.


Short URL : https://goo.gl/YhSSOQ
  1. https://goo.gl/uHvdIh
  • https://goo.gl/kyb3Um
  • https://goo.gl/5ZKEpg
  • https://goo.gl/VcI99x
  • https://goo.gl/smOHg2

You can also read ...

Central Bank of Iran Against Market Intervention
Central Bank of Iran's Governor Abdolnasser Hemmati said the...
New Forex Initiative Unable to Tip Scales
The new forex initiative has only managed to fix major policy...
VDMA Backs Iran Trade
Germany’s plastics and rubber machinery trade association,...
Equity-Based Sukuk Return to Iran Capital Market
The government is set to clear part of its debt to Social...
Musk Bid for Tesla Still Murky
Tesla Inc’s board named a special committee of three directors...
Tehran Shows 4th Biggest Upturn in Economist’s Livability Index
Tehran is one of the top five cities in the world to have...
Over €81m Worth of Airport Equipment Purchased  Post JCPOA
Iran Airports & Air Navigation Company, an arm of the...
S. Korea Bans Recalled BMWs Over Fire Fears
The South Korean government has said it will ban about 20,000...

Add new comment

Read our comment policy before posting your viewpoints