Alibaba sells stake in e-commerce branding services firm Baozun for US$21.8 million as part of corporate restructuring

Alibaba Group Holding is selling its entire stake in e-commerce branding solutions provider Baozun, as the Chinese technology giant continues its corporate restructuring amid increased industry competition.

Hangzhou-based Alibaba, owner of the South China Morning Post, on Thursday signed a deal to sell 26.5 million Baozun shares to Champion Kerry for US$21.8 million, according to Baozun's latest regulatory filing. Those shares represent about 14.4 per cent of the total outstanding shares of Baozun as of March 31 this year.

That transaction followed Alibaba's disposal of nearly US$360 million worth of Bilibili shares in March at a significant discount, according to stock exchange filings. In the same month, the e-commerce giant also raised about US$314 million from its sale of 33 million US-traded shares of electric vehicle maker Xpeng.

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The latest deal shows Alibaba's continued adjustment of the corporate overhaul it announced in March last year, underscoring the impact of China's shaky post-pandemic economic recovery that has weakened consumer spending and resulted in slower growth for the domestic internet sector.

The headquarters of e-commerce branding solutions provider Baozun in Shanghai. Photo: Baozun alt=The headquarters of e-commerce branding solutions provider Baozun in Shanghai. Photo: Baozun>

During a conference call in February, senior Alibaba executives said the company is sharpening its focus on its e-commerce and cloud computing businesses, while putting noncore operations up for sale.

Baozun said it will maintain a "mutually beneficial business relationship" that includes a strategic cooperation with Alibaba. Following the transfer of shares to Champion Kerry, Alibaba will cease to be a shareholder of Baozun.

Founded in 2007 in Shanghai, Baozun provides integrated e-commerce branding solutions - covering information technology systems, store operations, digital marketing and customer services - on the mainland. It serves more than 450 brands around the world, according to its website.

Baozun, which is listed on the Nasdaq and Hong Kong stock exchanges, this week reported first-quarter revenue of 2 billion yuan (US$274.2 million), up 4.9 per cent from 1.9 billion yuan in the same period last year. It also posted a narrower net loss of 66.6 million yuan, from 83.5 million yuan a year ago.

The company's Hong Kong-listed shares have fallen 91.5 per cent since it completed its secondary listing in 2020.

Baozun is listed on both the Nasdaq and Hong Kong stock exchanges. Photo: Baozun alt=Baozun is listed on both the Nasdaq and Hong Kong stock exchanges. Photo: Baozun>

Alibaba was an early investor in Baozun, injecting 32.7 million yuan during the A-round financing in 2010.

As competition heats up with younger rivals like PDD Holdings' Pinduoduo and ByteDance-owned Douyin, a Reuters report in February, citing unnamed sources, said Alibaba was also considering the sale of its bricks-and-mortar retail chains Freshippo and RT-Mart. This was subsequently denied by Alibaba.

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