Alibaba Hits Pause on Retail Platform to Reinvent Business Strategy and Dive into AI

Alibaba Group Holding Ltd BABA is pausing the operations of Ling Shou Tong (LST), its nine-year-old sourcing platform designed to digitize the supply, inventory, and logistics for small convenience stores. 

Effective March 30, the halt is attributed to “business adjustments” and will occur while LST continues to fulfill existing orders and provide after-sales service.

Initially celebrated as part of Alibaba’s new retail strategy, LST had successfully enrolled over 1.5 million stores by 2020, SCMP reports.

Also Read: Alibaba’s AliExpress Sees Order Surge with New 5-Day Delivery to the US, Expanding Global Reach

Despite the suspension, Alibaba clarified that LST is neither shutting down nor merging with 1688, Alibaba’s wholesale platform. 

Last week, Alibaba sold approximately $360 million of its shares in Bilibili Inc BILI, a Chinese streaming service, to reallocate resources towards investments in artificial intelligence and refresh its overall business approach. 

This divestiture aligns with Alibaba’s larger goal of shifting focus away from sectors like electric vehicles and AI towards strengthening its core operations in retail and technological sectors, especially cloud computing and artificial intelligence.

In addition to this sale, Alibaba has cut down on its stakes in companies such as XPeng Inc XPEV, SenseTime Group Inc, and GogoX Holdings Ltd while actively participating in funding rounds for emerging Chinese AI startups.

Meanwhile, Alibaba plans to introduce a new RISC-V processor, the XuanTie C930, through its Damo Academy this year to counteract the impact of stringent U.S. export controls on advanced chip technologies in China. 

Recent discussions have highlighted the growing competition Advanced Micro Devices, Inc’s AMD X86 chips face from China’s increasing adoption of RISC-V architecture.

Alibaba stock lost over 16% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF PGJ and ProShares Online Retail ETF ONLN.

Price Action: BABA shares traded lower by 0.29% at $71.92 premarket on the last check Monday.

Also Read: Huawei’s Ambitious AI Chip Developments Trigger Potential US Sanctions on Chinese Firms

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.