New retail may become the next stop of Alibaba's transformation.
On February 1, it was reported that Alibaba was considering Intime Department Store.
According to reports, "people familiar with the matter" revealed that Alibaba has approached several companies to assess their interest in acquiring Yintai. In 2023, Tsai Chongxin will take over from Daniel Zhang, and Ali will start the ** negotiations around this time. Just last month, Ali held talks with a potential buyer, a "person familiar with the matter" said. It is said that Yintai currently has more than 100 stores and shopping malls in China.
According to the report, in the privatization deal led by Alibaba in 2017, Yintai was valued at about US$4 billion. However, in the face of environmental changes, it is unclear whether Yintai will still be able to generate enough interest from buyers, and "early exploratory negotiations may fail". According to the report, this move means that Tsai Chongxin and Alibaba's new CEO Wu Yongming are considering the next step of Alibaba's reform, and it also means that Ali is re-examining its "new retail" ambitions.
*Screenshot of the report.
The Observer Network asked Yintai for confirmation on this matter. As of 17:00 on the 1st, there was no response.
Ali Yintai's hand-holding history.
Yintai Retail is a well-known department store chain in China, operating department stores and shopping malls in first- and second-tier cities in China, including Hangzhou.
The history of cooperation between Alibaba and Yintai can be traced back to 10 years ago.
In May 2013, Alibaba and Yintai Group jointly built the "China Intelligent Logistics Backbone Network" project, namely Cainiao Network, and Yintai Group invested 1.6 billion yuan, accounting for 32% of the shares, becoming the second largest shareholder. In October of the same year, Alibaba Group announced a strategic partnership with Yintai to explore the integration of online and offline (O2O). As the first step of the cooperation between the two parties, Yintai Retail Group will participate in the "Double 11" event on Tmall and support the event with the relevant resources of 35 offline physical stores at that time.
In November 2013, the cashiers of 29 Yintai stores across the country supported Alipay wallet payment. In March of the following year (2014), Yintai Retail Group joined hands with Alipay Wallet to launch the first virtual membership card "Yintai Bao" – in March 2014, Alibaba announced that it would increase the price of 53Invested HK$700 million in Yintai Retail. The two companies will connect the future business infrastructure system online and offline, and will form a joint venture.
In May 2015, Daniel Zhang, then CEO of Alibaba, became the chairman of the board of directors of Yintai Retail. This also marks the beginning of the Alibaba period for Yintai Retail.
On June 30, 2015, Yintai Retail Group held a transformation press conference, announcing its full integration with Alibaba Group, becoming an important platform for Alibaba Group to connect and integrate online and offline commerce. On June 29, 2016, Yintai Retail Group announced that it had accepted Alibaba's share exchange notice. After the completion of the share swap, Alibaba's total shareholding in Yintai will reach 2790%, officially becoming the largest shareholder of Yintai Retail.
On January 10, 2017, Yintai Retail announced on the Hong Kong Stock Exchange that Yintai would be privatized by joint offerors including Alibaba Investment, a wholly-owned subsidiary of Alibaba Group, and Shen **, the founder of Yintai Retail, in a transaction worth HK$19.8 billion (about RMB17.7 billion), representing a 42% premium to the last trading day before the suspension. According to the announcement, Alibaba will become the controlling shareholder of Yintai after the privatization, and its shareholding is expected to increase to about 74%.
Where is Alibaba's "new retail" going?
Yintai Commercial is rumored to be facing the first stage, which undoubtedly sends Alibaba's "new retail" strategy to the front of the stage.
In October 2016, Jack Ma proposed the concept of "new retail", emphasizing the integration of online, offline and logistics. In November 2016, Alibaba acquired a 32% stake in Sanjiang Shopping through its subsidiaries and made efforts to deploy offline supermarkets. Since then, the privatization of Yintai has also been seen as a move by Alibaba to strengthen offline and offline integration, and the news of the overseas e-commerce giant Amazon's layout of the physical supermarket Amazon Go at that time also stimulated the heating up of the new retail concept.
In the process of promoting Alibaba's new retail strategy, Daniel Zhang, the former CEO of Alibaba, plays a crucial role. According to public reports, in Daniel Zhang's view, there is no distinction between physical and virtual economy, only the old and the new. If you ignore opportunities, you will inevitably be marginalized or even eliminated. By integrating the power of mobile internet, real-time user data, and technology to improve operational efficiency, brick-and-mortar retailers can create new value for consumers.
However, the current internal and external changes are making "new retail" face the test in all aspects.
The global economic environment has changed, and the collective soaring of Chinese concept stocks has become a thing of the past, and Alibaba's market value is also different from the past. With the intensification of competition in core businesses such as e-commerce, and the gradual return of the market from the future story, Ali needs to think more pragmatically and calmly about each of its businesses - "new retail" is also difficult to stay out of. According to **, "in recent years, Ali executives have rarely talked about this concept".
In the view of some people, the essence of new retail is to use data and online services to modernize "old retail". In this process, the temperature of the market, the hardness of the information, and the depth of the first-class chain and logistics system are also crucial. The vision of new retail is wonderful, but it is also extremely difficult – and even how big its real market prospects are may be worth revisiting.
Alibaba is considering **Intime Department Store", which is still in the rumor stage. But some realities may have become clearer.
For Alibaba, the rethinking of "new retail" will be destined to be part of the rethinking of its diversified business. In the process of rapid growth of the Internet in China, many enterprises have diversified their layout. In the face of realistic changes, which businesses are the core, which businesses need to be adjusted, and which ones need to be adjusted....A lot of strategic thinking probably needs to be "redone". The era of "both, want, and want" is passing, and "what you don't want" may be more important than "what you want", and it is more difficult to choose.
This article is an exclusive manuscript of the Observer.com, and it is not allowed to be unauthorized and shall not be allowed.