Chinese ecommerce group Alibaba swung to its first quarterly loss since its US listing six years ago as a record fine levied by Beijing authorities weighed on its earnings, according to Financial Times. A month after it was hit with a $2.8bn penalty for allegedly abusing its market dominance, the company reported a net loss of Rmb5.5bn ($836m) on Rmb187bn in revenues for the quarter from January to March.
Revenues rose 64 per cent year on year, boosted by the acquisition of a supermarket chain last year, and came in ahead of analyst expectations.
Alibaba’s US listed shares fell almost 5 per cent in early trading. China’s reigning ecommerce leader also outlined a large investment plan aimed at competing with upstart rivals such as Pinduoduo, which overtook Alibaba in annual shoppers at the end of last year, in part by offering them massive discounts. Alibaba has also invested in taking on rival Meituan in food delivery.
Alibaba said it would invest all of its incremental profits over the next 12 months to build out its technology platform, support its merchants and attract new customers. It expects revenue to exceed Rmb930bn during the period, up from Rmb717bn this past year.
Cloud is a key profit driver for foreign tech giants like Amazon and analysts had expected Alibaba to benefit as the business finally turned profitable last year. Meanwhile, Alibaba’s results showed that its fintech arm, Ant Group, posted record profits in the fourth quarter of last year, the first indication of the condition of its business after Chinese authorities cancelled its $37bn initial public offering in early November.
Ant earned an estimated Rmb21.8bn in profit during the quarter, with its listing suspension coming midway through the October to December period. Alibaba books one-third of Ant’s profit a quarter late. The fourth-quarter profit equalled Ant’s reported 2020 first-half profit and was an increase on the estimated Rmb14.5bn it earned in the third quarter. Still, the profit came before Chinese authorities forced a wide-ranging restructuring of the company that will shrink its business this year.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
