Since March, a “steady recovery” has been seen by Alibaba in its business in China, said the Chinese e-commerce giant, but also warned about there are a lot of uncertainties in the path to economic recovery.
In the first three months of this year, there was a 22 per cent growth in the company’s sale even as the restrictions imposed because of the novel coronavirus outbreak in China and elsewhere impacted its activities.
The growth was more than what the market was expecting and was driven by growth in demand for groceries, electronics and cloud computing, the company said.
The results were however dampened by supply chain disruptions and investment losses.
Alibaba’s home market of China – which is a crucial part of its business, is being watched closely by economists, businesses, and policy makers and trying to get a sense of how the how the rest of the world might do economically by following the performance of China’s economy. The world economy has virtually come to a standstill with travel and movement restrictions and lockdowns and closure of shops and factories because of the novel coronavirus pandemic.
No economic target for the Chinese economy for the current year was set by Beijing earlier this week which is first for the country in about three decades.
And uncertainty due to the pandemic has also forced many global companies to scrap their previous forecasts for the year ahead.
Warnings of uncertainty were also sounded by Alibaba, which runs one of the world’s largest groups of shopping and digital media websites. The company also however told its investors that it expects a 27 per cent revenue growth over the next 12 months, compared to 35 per cent reported by it in the previous year.
“Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen steady recovery since March,” Alibaba chief financial officer Maggie Wu said.
However, in the three months to 31 March, the profits of the company were almost completely wiped out. A a loss of investment income was the primary reason for this, the company said.
In the first three months of the current year, sale of $16bn (114.3bn yuan) was reported by the company with an almost 19 per cent growth in revenues on its core shopping websites. there was a 58 per cent growth in sale in its cloud computing business as well.
But the company reported significantly slower growth in its international business. Accounting for about 7 per cent of the total revenues of the company, this branch includes Southeast Asia shopping website Lazada.
“For our international commerce businesses… the timing and pace of recovery is still uncertain as demand in countries outside China remains soft,” Alibaba said.
(Adapted from BBC.com)