Alibaba quarterly revenue up 2%

BEIJING – China’s Alibaba Group said on Thursday its revenue rose 2% year-on-year in the quarter ended December 2022, as the internet giant shook off the impact of stringent Covid containment measures and a drop in consumer demand.

The company reported revenue of 248 billion yuan ($36 billion) in the three months through December, according to a quarterly earnings report.

“We delivered a solid quarter despite weaker demand, supply chain and logistical disruptions due to the impact of changes in Covid-19 measures,” said President and CEO Daniel Zhang.

“Looking ahead, we expect a continued recovery in consumer sentiment and economic activity,” he added.

China maintained a strict Covid-zero policy until the end of last year, quickly adhering to a strategy of rapid lockdowns and prolonged quarantines even as they disrupted global supply chains and stifled demand.

Beijing abruptly changed course in December, lifting years-old restrictions in a matter of days.

“During the last quarter, we continued to improve operational efficiency and cost optimization, which resulted in robust profit growth,” said Alibaba CFO Toby Xu.

“Our net cash position remains strong and we continue to generate healthy cash flow,” he said.

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China’s tech industry has been hit in recent years by a wide-ranging crackdown, with authorities canceling at the last minute the planned 2020 IPO of Alibaba Ant Group’s Hong Kong financial affiliate Ant Group.

The government also subsequently fined Alibaba a record $2.75 billion for alleged unfair practices.

Alibaba’s billionaire founder Jack Ma retreated from public view after a public speech in 2020 accusing financial regulators of stifling growth.

He said in January he would relinquish control of Ant, which operates Alipay, the world’s biggest digital payments platform.

Alibaba earnings data showed a three percent increase in year-over-year revenue for the quarter ended September 2022.

The company did not release full sales figures for its annual Singles’ Day shopping bonanza for the first time.

The company said in December that its business faced a “deteriorating macroeconomic backdrop, wild swings in financial markets and fluctuating geopolitical tensions” over the past year.

Combined revenue for China’s internet companies shrank by just over one percent to 1.46 trillion yuan in 2022, the first contraction in nearly a decade, according to data from the Ministry of Industry and Information Technology.

But the crackdown appears to be easing as the country struggles to boost economic growth hit by three years of zero Covid restrictions.

In December, authorities said they would allow Ant to raise 10.5 billion yuan, while ride-sharing company Didi started accepting new users last month for the first time since a ban on new registrations in 2021.

Chinese tech companies are now racing into the AI ​​chatbot field, inspired by the success of Silicon Valley’s ChatGPT.

Alibaba said this month it was developing a conversational bot similar to ChatGPT, which is being tested by employees. (AFP)

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