According to sources cited by Bloomberg News on Friday, Alibaba Group Holding Ltd from China has decided to delay the potential initial public offering (IPO) of its Freshippo grocery chain in Hong Kong due to the current lackluster sentiment surrounding consumer stocks.

The Chinese tech conglomerate has determined that it is probable to attain a valuation of approximately $4 billion for Freshippo. This valuation is below the $6 billion to $10 billion range it had initially aimed for when contemplating a private funding round last year, as per the report.

In May, Alibaba announced its plan to complete Freshippo’s IPO within a timeframe of six to twelve months. Additionally, the company was contemplating the possibility of listing its logistics unit, Cainiao.

The capital management committee at Alibaba, responsible for overseeing the company’s restructuring, has opted to postpone the Freshippo IPO until more favorable market conditions emerge. The report further mentioned that their current priority is the listing of other business units.

Alibaba did not provide a comment in response to a request for comment from Reuters.

In a significant restructuring unveiled in March, Alibaba announced its intent to divide into six separate units and explore fundraising and public listings for the majority of them. This decision coincided with China’s easing of regulatory pressures on domestic technology firms.

In a report last year, Reuters disclosed that Freshippo was aiming to secure funding at a valuation of approximately $6 billion, significantly less than the earlier, more ambitious target of up to $10 billion.

Freshippo is a Chinese supermarket chain that provides additional services such as dining options and 30-minute home delivery. Established in 2016, the company had a total of 273 stores as of March 2022, as indicated on its website.

The US-listed shares of Alibaba showed no significant movement in early trading.