The Wanda Plaza mall in Nanchang. Shutterstock.
According to China’s national enterprise credit database, Suning Holding Group’s shareholders have pledged all of the company’s equity, worth 1 billion yuan, to Alibaba’s Taobao division in order to secure a loan.
Suning is one of China’s biggest retail chains, in addition to owning 37 department stores it acquired from Wanda Group last year and concept stores under its Jiwu brand. After taking a loan against its equity, Suning could be taken over by Taobao or be sold if the company fails to pay back the sum. A Suning representative has told local media outlets that the share pledge won’t change its e-commerce and retail strategy.
The news points to China’s uneven recovery post-Covid-19, as share pledging is typically a last resort for companies who are struggling to secure needed funds. It also highlights the market consolidation that could occur as a result of the crisis. The news comes just weeks after Alibaba announced a deal with Farfetch and Richemont, further cementing the former’s status as China’s leading e-tailer for luxury and fashion.