Chinese e-commerce group Alibaba (Alibaba) is mired in its first quarterly loss since it went public in the United States in six years, as record fines imposed by Beijing authorities put pressure on its earnings. On Thursday, one month after the company was fined US$2.8 billion for allegedly abusing its dominant market position, the company reported that it had revenues of 187 billion yuan in the January-March quarter and a net loss of 5.5 billion yuan (US$836 million). ). Driven by the acquisition of a supermarket chain last year, revenue increased by 64% year-on-year, exceeding analyst expectations. CEO Daniel Zhang (Daniel Zhang) said: “In the past fiscal year, we have experienced various challenges, including the Covid-19 pandemic, fierce competition and antitrust investigations.” Zhang said that the company has been “sincere The “land” has received record antitrust penalties and will ensure “resolutely” compliance in the future.
He added that this helps them reflect on their “social responsibility and commitment.” Alibaba’s US-listed shares fell nearly 5% in early trading. The incumbent Chinese e-commerce leader also outlined a large investment plan designed to compete with upstart competitors like Pinduoduo. Pinduoduo surpassed Alibaba among shoppers of the year at the end of last year, partly because of the huge discounts offered to them. Alibaba has also invested in food delivery to compete with rival Meituan. “We can see that many competitors are suffering huge losses and have made a lot of investment… We have no reason not to invest.” Chief Financial Officer Maggie Wu said. Alibaba said it will invest all its incremental profits in the next 12 months to build its technology platform, support its merchants and attract new customers. The bank predicts that during this period, revenue will exceed 930 billion yuan, higher than last year’s 717 billion yuan
In the first quarter of this year, sales of Alibaba’s main e-commerce sites Taobao and Tmall increased, but as key customers reduced their usage internationally, the growth of its cloud computing business fell 37% year-on-year. Alibaba did not disclose the customer’s name, but Bernstein analyst Robin Zhu said that it is most likely ByteDance, the Chinese technology company behind TikTok. He said: “The loss of this business will continue to hinder Alibaba Cloud’s revenue growth in the coming year.” For foreign technology giants like Amazon, cloud is the main profit driver, and analysts previously expected Alibaba to benefit from it. Because the business finally became profitable last year..
At the same time, Alibaba’s results showed that its fintech arm, Ant Group, posted record profits in the fourth quarter of last year. This is the first sign of its business conditions after the Chinese government cancelled US$37 billion in early November. Initial public offering. Ant has achieved a profit of approximately 21.8 billion yuan in the quarter, and its trading suspension will take place from October to mid-December. Alibaba gained a third of Ant Financial’s profits later in the second quarter. The profit in the fourth quarter is equal to the profit announced by Ant Financial for the first half of 2020, and is an increase from the estimated revenue of RMB 14.5 billion in the third quarter. Nevertheless, before the Chinese authorities forced the company to carry out a large-scale restructuring, the company made a profit, and the company will reduce its business this year.