Chinese ecommerce giant Alibaba, known for running Aliexpress, failed to achieve the results forecast by financial analysts for the first quarter of this year, according to data published by Reuters on Tuesday (3). Despite the increase in revenues in the period, there was a drop in profits due to heavy investments in new businesses.
In addition to increased competition, with the emergence of other companies in the country, such as JD.Com and Pinduoduo, the current context of the covid-19 pandemic also impacted the performance of electronic commerce, like nacor… That’s because , with the relaxation of movement restrictions, more consumers prefer to buy in physical stores.
Alibaba’s total revenues for the quarter ended June rose to 205.74 billion Chinese Yuan (Remimbis), equivalent to about R$ 166 billion, which represents an increase of 34% compared to the previous year, but below from previously projected estimates of 209.39 billion yuan.
Net profit attributable to shareholders declined from 47.59 billion yuan last year to the current 45.14 billion yuan (£36.4 billion).
Results of other companies in the Alibaba group
In the first quarter of 2021, Ant Group, a fintech affiliate to conglomerate Alibaba, posted a profit of about 13.5 billion yuan (£10.9 million). As a result, the Chinese ecommerce giant, which owns about a third of Ant’s capital, posted a profit of 4.49 billion yuan (£3.6 billion) for the quarter ended June 30.
Another 16 billion yuan (£13 billion) came from Alibaba’s cloud computing division, which grew 29% year-on-year. During a earnings conference call with investors, Alibaba CEO Daniel Zhang also revealed that the company would continue to monitor the impact of ongoing regulatory changes on the company’s business.