Chinese online giant Alibaba has joined forces with Intime Retail Group’s founder to acquire the Chinese department store operator for 2.4 billion euro.
New form of retail
Alibaba already owns 27.82 % of Intime’s shares, while its founder (Shen Guo Jun) also owns 9.17 % of shares. Together, they will acquire the Chinese department store and shopping mall operator through internal cash resources and external debt financing. The goal is to implement a series of long-term growth strategies, which could also impact its short-term growth. Alibaba Group CEO Daniel Zhang is combative in his statement, saying “those who cling to the old ways of retailing will be disrupted”.
Joining forces with Intime’s potential (29 department stores and 17 shopping malls in China’s so-called first- and second-tier cities), Alibaba wants to tap into the “long-term growth potential of a new form of retail in China powered by Internet technology and data”. Alibaba already has a firm grip on China’s online markets, it also targets physical stores to merge them with its own strengths to create a new shopping experience. Intime had already admitted its recent profit and turnover drop was because of increased online competition.
At the same time, Alibaba’s founder, Jack Ma, met with president-elect Donald Trump to unveil his plans to bring more than a million American businesses to its online platform, which should open up the Chinese market for American companies.