Chinese e-commerce giant Alibaba announced
Tuesday a modest increase in annual revenue, as the firm pursues a major
overhaul and regulatory curbs on the country’s tech sector are relaxed.
The Hangzhou-based company is one of the biggest players in China’s tech
industry, with operations spanning retail, digital payment, artificial
intelligence and entertainment.
Alibaba posted revenue of 941.2 billion yuan (130.4 billion dollars) in the fiscal
year ending March 31, up eight percent year-on-year, a statement by the firm
showed.
Net income for the period stood at 71.3 billion yuan, up nine percent
year-on-year, the statement also showed.
Alibaba announced plans last year to undergo a significant restructuring
that would see it split into six entities, each managed by its own CEO and
board of directors.
“During fiscal year 2024, we repurchased 12.5 billion USD of shares and our
board of directors has approved a 4.0 billion USD dividend for fiscal year
2024,” said Toby Xu, the group’s Chief Financial Officer.
China’s tech sector has suffered under a regulatory crackdown by Beijing
that began in 2020, prompted in part by the government’s fears that too much
power and capital had been amassed by a few firms.
But Beijing has signalled recently that the period of intense regulatory
scrutiny is winding down, as new headwinds threaten to drag on the world’s
second-largest economy.
Alibaba’s decision to restructure is seen by analysts as intended to make
the firm more nimble and help isolate parts of the business from potential
future crackdowns.
But the firm’s planned overhaul has encountered obstacles.
In March Alibaba withdrew a planned initial public offering (IPO) for its
logistics arm Cainiao, saying it would support the platform “to execute a
long-term strategic expansion of its global logistics network”.
And last November saw the firm cancel a spin-off of its cloud computing
business — a planned move that was also part of the overhaul blueprint.
Uncertainty about Alibaba’s future development has persisted ever since top
leaders in Beijing scuttled a planned IPO of its financial services arm, Ant
Group, in late 2020.
The cancelled public listing — which would likely have been the biggest in
history — was followed one month later by an announcement that Alibaba was
under formal investigation in China for alleged monopolistic practices.
Sluggish spending
Alibaba on Tuesday said it was still committed to long-delayed plans to
convert to a dual primary listing in both New York and Hong Kong, nearly two
years after announcing the plan.
“We have been preparing for our primary listing in Hong Kong and currently
expect to complete this conversion by the end of August 2024,” it said in its
filing on Tuesday.
Tuesday’s release of annual earnings was the first since Alibaba announced
in September the surprise departure of former CEO Daniel Zhang.
Zhang has since been replaced by Joseph Tsai as chairman and Eddie Wu as
CEO. Both positions were held by Zhang prior to the reshuffle.
Fiscal year 2023 yielded lacklustre results, with annual revenue increasing
by just two percent year-on-year.
Founded in the eastern city of Hangzhou in 1999 by
entrepreneur-turned-celebrity Jack Ma, Alibaba is a key player in the
country’s digital sector and is considered a barometer of consumer spending in
China.
Fellow internet giant Tencent posted weakened revenue growth in the first
three months of this year, also on Tuesday.
Tencent said its first quarter revenue grew six percent, the weakest growth
recorded by the firm in over a year as it continues its push into AI.
The Shenzhen-based company is one of the most valuable players in China’s
tech industry. It operates the country’s ubiquitous “super-app” WeChat and
offers diverse offerings in gaming, cloud computing, content streaming, and
artificial intelligence.
Beijing has been seeking to increase state support for a flagging economy
in recent months, as high youth unemployment and a spiralling debt crisis in
the property sector threaten to drag down growth.
Retail sales growth — a key gauge of consumer spending — slowed to 3.1
percent year-on-year in March, official statistics showed last month, down
from 5.5 percent in the first two months of 2024.
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