The Chinese e-commerce giant Alibaba announced Thursday for 2021 a 59% drop over one year in its net profit, against a backdrop of an economic slowdown in China and regulatory tightening in the technology sector.
Anti-Covid restrictions are weighing heavily on the country’s economy, with consumption at its lowest for two years and unemployment close to an all-time high, which in turn is penalizing e-commerce companies.
The company is also facing increased competition and a regulatory tightening imposed by the government.
In this context, the group founded by the whimsical Jack Ma reported on Thursday a significant decline in its profit last year. It amounted to 61.9 billion yuan (8.8 billion francs), against 150.3 billion yuan a year earlier – a drop of 59%.
Over one year, its turnover increased by 19%, to 853 billion yuan (118.3 billion euros).
Impact of the resurgence of covid
In the last quarter of its staggered financial year, the group also accuses some 2.3 billion euros of losses, which it puts on the account of the “epidemic resurgence in China, in particular in Shanghai”.
Faced with the resurgence of Covid-19 which has hit China for a few months, a large part of the 25 million inhabitants of the economic capital have been forced to stay at home since the beginning of April, which is heavily penalizing activity.
The zero Covid strategy pursued by the Chinese authorities, which sometimes leads to preventive confinements or closures of businesses, is also disrupting supply chains and deliveries and dampening demand.