Alibaba Group has agreed to sell its majority stake in Sun Art Retail Group to private equity firm DCP Capital for up to HK$12.3 billion ($1.6 billion), a significant discount from its 2020 investment of $3.6 billion. The sale marks Alibaba’s continued retreat from physical retail, part of a broader strategy to focus on core online businesses under new CEO Eddie Wu. Facing intensified competition from PDD Holdings and ByteDance, Alibaba is redirecting resources toward AI, cloud computing, and international expansion while shedding non-core assets, including its Intime department store business and now Sun Art. Despite incurring an estimated $3 billion in losses from physical retail investments, the company views these disposals as opportunities to realign priorities and enhance shareholder returns.