In less than 4 years, the CEO of Gaoxin Retail, the parent company of RT Mart, stepped down and returned to Alibaba. The new retail formats of Alibaba have changed hands, once again sparking speculation about asset sales.
On the evening of March 26th, Gaoxin Retail (06808. HK) announced that starting from March 26th, 2024, Lin Xiaohai will resign as the Executive Director and CEO of Gaoxin Retail, and will be transferred back to Alibaba Group for another appointment. Since March 27, Shen Hui, the former Auchan executive of Gaoxin Retail, has been appointed as the executive director and CEO of Gaoxin Retail. Gaoxin Retail has signed a service agreement with Shen Hui for a fixed term of three years.
According to a reporter from Pengpai News, Lin Xiaohai, former Vice President of Alibaba, joined Gaoxin Retail in May 2020 and officially took over as the head of RT Mart from Huang Mingduan in December of that year. According to public information, Lin Xiaohai graduated from South China University of Technology and had 21 years of work experience at fast-moving consumer goods giant Procter&Gamble. Before joining Alibaba in 2016, he served as the Marketing President for Procter&Gamble Greater China. After joining Alibaba, Lin Xiaohai served as Vice President of Alibaba and General Manager of the Retail Business Unit.
According to this announcement, Shen Hui, 49 years old, obtained a Bachelor's degree in Management from Harbin Institute of Technology in 1996, and has accumulated over 20 years of rich management experience in the Chinese retail industry. Shen Hui joined Gaoxin Retail Group as a department manager in 1999, participated in the preparation and construction of the "Auchan" brand entering China, and successively served as the general manager of the store and the human resources director of Auchan China. Shen Hui was the general manager of the "Auchan" brand operation hypermarket of Gaoxin Retail Group from February 2016 to May 2017, responsible for the overall operation performance management and business strategy formulation of the "Auchan" brand hypermarket.
In recent years, the news of RT Mart's successive closures has attracted public attention.
At the end of February, according to incomplete statistical verification by reporters from Pengpai News, five RT Mart stores have announced their closure since 2024. Among them, RT Mart's Huanggang store closed on February 6th, RT Mart's Deyang store closed on February 26th, RT Mart's Xuefu Road store closed on February 29th, RT Mart's Caitang store closed on February 29th, and RT Mart's Zhuzhou store closed on March 4th, involving Huanggang in Hubei, Deyang in Sichuan, Zhenjiang in Jiangsu, Xiamen in Fujian, and Zhuzhou in Hunan. In addition, according to multiple media reports, at least ten RT Mart stores have closed or announced closure since January 2023, mainly due to lease expiration, business adjustments, upgrades and renovations, and some stores have not explained the reasons for closure.
However, apart from closing stores in some areas, RT Mart is still continuing to open new stores. Overall, based on the information released by RT Mart, the parent company of RT Mart, Gaoxin Retail, is accelerating its opening of stores in multiple formats. Starting from March, it will open stores in multiple provinces and cities in Sichuan, Hubei, Jiangsu, and Shandong, covering three formats: RT Mart, RT Mart Super, and M member stores, and will renovate and upgrade its old stores. This is another acceleration of Gaoxin Retail after opening 12 new stores in 10 cities nationwide in January this year. Pengpai News reporter learned that Gaoxin Retail will open a total of 21 new stores across the country in three business formats.
At the end of February, RT Mart told a reporter from Pengpai News that "closing and opening stores are very normal market actions for retail enterprises, and RT Mart will continue to steadily open good stores according to the company's plan. We hope to pay more attention to the information of our new stores." Alibaba insiders also said, "We have noticed the changes in the number of RT Mart stores, and there are indeed some store adjustments in the short term, mainly for restructuring and upgrading, and there will actually be new openings in the future."
It is worth noting that Alibaba's retail business is not calm, with changes in executives and multiple clarifications of sales rumors.
On March 18th this year, Hema officials confirmed to reporters that Hema CEO Hou Yi (flower name: Lao Cai) has officially retired at the age of 60 and will serve as Hema's Chief Honorary Advisor in the future. Yan Xiaolei (flower name: Baihe), the current CFO of Hema, will also serve as CEO. Yan Xiaolei has been at Hema for over six years.
On March 16th, it was reported that Alibaba has basically decided to sell RT Mart and Hema to COFCO internally. RT Mart is estimated to be around 10 billion yuan, while Hema is estimated to be around 20 billion yuan. The framework agreement between the two parties has been drafted, and Jack Ma has made the final decision within Alibaba. Regarding the news that Hema and RT Mart will be sold to COFCO, both Hema and RT Mart have denied it.
Since the end of last year, there have been frequent rumors of Alibaba's retail business being sold by Alibaba. On February 2nd of this year, it was reported that Alibaba is considering selling some consumer industry assets, including RT Mart. The news indicates that Alibaba has been in negotiations with multiple strategic and financial investors regarding related assets. Pengpai News also sought confirmation from Lin Xiaohai, the then CEO of Gaoxin Retail, regarding the rumor, but Lin Xiaohai has not yet responded to the sale rumor.
At Alibaba's financial report conference call on February 7th, Alibaba Group Chairman Cai Chongxin stated that there are still many traditional physical retail businesses on Alibaba's balance sheet, which are not core businesses. It is reasonable to exit, but considering the current challenging market situation, it will take time to achieve.
It is uncertain whether Cai Chongxin's reference to "traditional physical retail business" refers to RT Mart. It was rumored that not only RT Mart but also Intime Department Store would be sold that month. The media has reported that Alibaba has had contact with several companies to evaluate their level of interest in acquiring Intime. Alibaba did not respond to the news.
It is reported that in terms of retail formats, Alibaba invested in Intime Department Store in early 2014, and then successively invested in Xinhuadu, Lianhua Supermarket, Suning, and Surprise Home. In early 2016, Alibaba launched a new supermarket format called Hema Fresh in Jinqiao, Shanghai. In 2017, Gaoxin Retail entered Alibaba's vision and further gained an increase in its holdings in October 2020, with Alibaba obtaining a 72% controlling stake. After entering the Alibaba system, although Gaoxin Retail received support from Alibaba and was the first to carry out digital transformation in the supermarket retail industry, it still remained relatively independent in terms of management. Until May 2020, Lin Xiaohai, who had previously served as Alibaba's Vice President, joined Gaoxin Retail. He officially took over from Huang Mingduan as the head of RT Mart on December 1, 2020. That month, the IP image "Fage" represented by RT Mart also officially joined Alibaba's "Zoo".
According to the 2023 semi annual report of Gaoxin Retail, the company's revenue for the six months ended September 30, 2023 was 35.768 billion yuan, a year-on-year decrease of 11.9%; The net loss reached 378 million yuan, an increase of 334.5% year-on-year. Gaoxin Retail pointed out in its financial report that the decrease in gross profit is mainly attributed to the shrinkage of Taocai Cai and Tmall's shared inventory business, as well as the contraction of supply guarantee business, maintaining price competitiveness and reducing inventory in the process of streamlining products, as well as a decrease in marketing investment under the hoarding mentality in 2022.