Alibaba reported a big quarter for its e-commerce business. However, the tech firm faced nervous investors on Tuesday as a regulatory crackdown by Beijing and Jack Ma’s fall from grace.
The company reported a 37% increase in its revenue for the quarter ended last December compared to a year earlier. This result was better than expected, according to forecasts from Refinitiv.
Alibaba(BABA)’s core e-commerce operations further benefited from the pandemic as more and more people turn to online shopping. And the most recent quarter included the company’s big Singles Days sales blitz, which brought in tens of billions of dollars last year.
“Thanks to the rapid recovery of China’s economy, Alibaba had another very healthy quarter,” said Daniel Zhang, chairman and CEO of Alibaba.
Concerns from investors
Even though Alibaba achieves strong revenue, it might not be enough to soothe the concerns of the investors. This is because they are worried that Chinese authorities might come down on Alibaba.
“If the Chinese government is looking to crackdown on outspoken entrepreneurs and take a more conservative line with their larger tech businesses, then this will dent investors’ confidence in the brand,” said Halliwell.
Jack Ma built Alibaba into one of the most powerful tech titans in China. It generated approximately $80 billion in revenue for the fiscal year that ended last March. Besides, it has a market capitalization of more than $700 billion, making it a valuable tech company.
But Beijing has been increasingly concerned about these tech companies. This is because private tech firms have over the financial industry and other sensitive areas, and how entrenched they have become to everyday life in China through digital payments apps and other services.
Last November, China regulators shelved the highly anticipated IPO of Ant Group. Since then, the landscape further worsens for Alibaba and other Chinese tech firms. Consequently, president Xi Jinping called efforts to strengthen anti-monopoly rules against these online platforms last December.
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