- Alibaba’s revenue rose 2% to $35.92 billion for its fiscal third quarter to Dec. 31, beating expectations.
- CEO Daniel Zhang says merchants eager to get back in business and expects recovery to continue
- Alibaba will continue to invest in large-scale pretraining model for AI.
- The tech giant’s U.S.-listed shares rose 6%
Alibaba Is Turning A Corner
Alibaba Group Holding Ltd (NYSE:BABA) is starting to turn a corner as consumer confidence slowly returns after China’s onerous zero-Covid crackdown, but it’s going to take time before its powering on all cylinders again. Revenues rose 2% during the quarter when restrictions were finally eased.
It’s little surprise it’s been slow going given that 2022 marked one of China’s sluggish years of economic growth in decades. Chinese consumers have also had to deal with rising infections as lockdowns were lifted. Demand was still suppressed in January and February as Covid spread and the New Year celebrations also disrupted sales.
But now that cases have subsided, consumer sentiment has risen and the desire to spend is snapping back, which combined with a readiness of online merchants to deal with demand bodes well for Alibaba’s continued recovery.
As the world’s largest e-commerce company, it has 1.3 billion active yearly customers which gives it vast mines of information to use to optimise the virtual shopping experience. It’s little wonder the company has announced it’s continuing to invest in a large-scale AI deep-learning model which can be trained on large datasets.
Not only will this help power its e-commerce arm, but this technology can also be used be to cross-fertilise growth in its cloud business, which lags many of the big global competitors. Investors may still be wary of just how this expansion will be managed, given how Alibaba has already been subject to intense regulatory scrutiny.
Article by Susannah Streeter, head of money and markets, Hargreaves Lansdown