(Yicai) April 2 -- Shares in Beijing Shiji Information Technology slumped today after Chinese e-commerce behemoth Alibaba Group Holding said it is selling its equity in a unit of the Chinese developer of software solutions for the hospitality, food and beverage, and entertainment sectors for CNY615 million (USD85 million).

Shiji Information’s share price [SHE:002153] closed down 3.8 percent at CNY7.09 (USD 0.98) today.

Alibaba is selling its entire 38 percent stake in Shiji Retail, a company that develops tailored applications for retailers, back to Shiji Information, which will be the sole owner, Beijing-based Shiji Information said yesterday.

Alibaba paid USD486 million for the equity in Shiji Retail, whose clients include US beverage giant PepsiCo, French cosmetics firm L'Oreal and supermarket chain operator Suning Electric, in April 2018. At the time, Shiji Information said that the tie-up will help the two parties leverage each other’s strengths and give Shiji Retail a competitive edge in the retail digitization market.

Alibaba’s original goal of investing in Shiji Retail has been accomplished, Shiji Information said. And so, as Alibaba adjusts its retail strategy, the two parties have agreed to separate, it added. However, it is a connected transaction as Alibaba unit Taobao Software is the second largest shareholder in Shiji Information with a 13 percent stake.

Alibaba has been withdrawing from non-core businesses in the past few months. Last month, the Hangzhou-based company confirmed that it has offloaded USD357.8 million worth of Chinese short video site Bilibili’s stock.

"Alibaba still holds some traditional brick-and-mortar retail businesses, and since they are not the company's core focus business, it makes sense to exit," Chairman Cai Chongxin said in February. “But given the current market conditions, it may take time to exit.”

Editor: Kim Taylor