Home Business Alibaba reports loss of $2.9 billion in third quarter

Alibaba reports loss of $2.9 billion in third quarter

by kenya-tribune
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BEIJING, China, Nov 17 – Chinese e-commerce giant Alibaba on Thursday reported a loss of 20.6 billion yuan ($2.89 billion) for the third quarter, as the company grapples with an economic slowdown and an anti-monopoly crackdown.

The heavy net loss attributable to ordinary shareholders was primarily due to a “decrease in market prices of our equity investments in publicly traded companies”, among other factors, the company said in a statement.

Alibaba’s performance is widely seen as a gauge of Chinese consumer sentiment, given its market dominance.

Revenue for the three months ending September 30 was up three percent year-on-year at 207.2 billion yuan, which Chief Financial Officer Toby Xu said was achieved “in spite of the impact on consumption demand by the Covid-19 resurgence in China as well as slowing cross-border commerce”.

Alibaba said it achieved revenue growth by “enhancing operating efficiency” as well as through the expansion of its logistics and services businesses, despite a slump in e-commerce sales within China.

It comes after the company earlier this year reported flat quarterly revenue growth for the first time ever.

– Flagging demand –

The company said in its statement on Thursday that revenue from domestic commerce had fallen in the third quarter, “mainly as a result of softer consumption demand, Covid-19 resurgence and restrictions, as well as ongoing competition”.

In a sign of difficulties for Alibaba, the company appears to have laid off a number of employees, with its headcount down more than 1,700 from the previous quarter.

China’s major tech companies have faced economic uncertainty, Covid-19 restrictions that have depressed consumer spending, as well as heightened scrutiny from regulators in recent months.

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Fellow tech titan Tencent reported on Wednesday its second quarterly drop in revenue in a row.

Alibaba in particular has been at the centre of regulatory crackdowns at home and abroad.

US authorities have put the company on a watchlist that could see it delisted in New York if it does not comply with disclosure orders, causing its shares to slump.

Chinese authorities pulled a planned IPO by the company’s financial arm Ant Group at the last minute in 2020, then hit Alibaba with a record $2.75 billion fine for alleged unfair practices last year.

The company’s Singles Day e-commerce festival, which traditionally dwarfs similar US events such as Black Friday and Cyber Monday, has been more muted in recent years.

Alibaba — alongside main rival JD.com — did not release full sales figures for the shopping bonanza for the first time ever this year, instead saying in a statement that sales were flat from last year.

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