E-commerce giant Alibaba on Thursday reported better-than-expected earnings and sales for the fourth quarter.
Alibaba said it now has more than 1 billion active customers in China, the first time the company has exceeded this milestone. Alibaba has more than 1.3 billion customers around the world.
Alibaba was able to report strong results “despite macroeconomic challenges affecting supply chains and consumer sentiment,” Alibaba Sharman and CEO Daniel Zhang said in a press release.
The company hopes the supply chain disruptions will end soon. “We definitely see signs of improvement in May,” said Toby Xu, Alibaba’s chief financial officer, during a conference call with analysts on Thursday, although delivery of suspended shipments will take “some time.”
Xu added that “many merchants may need to invest to increase their revenue,” especially as retailers prepare for Alibaba’s mid-year shopping festival on June 18.
Changing the shopping habits of Chinese consumers
Concerns about the emergence of Covid in major Chinese cities remain a major concern. This has made how (and what) Chinese consumers shop similar to what they do in the United States and other parts of the world.
“While our user traffic and engagement have remained stable, consumption patterns have changed across categories across our platforms,” Zhang said on a conference call.
He noted that sales in the fashion and electronics categories fell, but that “demand for basic commodities” such as groceries and personal care products “has increased significantly with more consumers stocking at home.” Other categories such as healthcare, sportswear and outdoor products have also grown rapidly, Zhang said.
But Alibaba faces other big challenges. Regulators in China are taking a closer look at the local tech giants in recent years. Many large Chinese companies trading in the US may be forced to delist from the New York Stock Exchange and Nasdaq.
Tensions between China and the United States remain high. President Biden continued to talk harshly about possible military intervention in China if it attacked Taiwan.
However, Biden and US Treasury Secretary Janet Yellen have indicated that they will work to roll back some of the tougher Trump-era tariffs on Chinese goods.
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