Due to the continuing pandemic measures in China, Alibaba‘s turnover remained flat last quarter. It is the first time ever that the e-commerce giant did not grow, but still the results are a lot better than expected.
Hurray for supermarkets
Alibaba’s turnover last quarter was almost exactly the same as a year ago: 205 billion yuan, just under 30 billion euros. It is the first time in the company’s history that there was no growth. Still, the figure exceeds all expectations, as China was still under the spell of the pandemic this spring. Not only did this result in less shopping, but factories closed down again and there were supply problems.
Non-food sales were hit hard: on online marketplaces Taobao and Tmall – the group’s main webshops – sales of physical goods fell by 10 %. By contrast, online supermarket Taocaicai, which allows consumers to pick up their shopping the next day at a local shop, grew by more than 200 % in the last quarter.
The group’s supermarkets also set records online: at the physical chain Freshippo, 68 % of sales were already made online. Alibaba therefore wants to focus even more on delivering food and daily groceries. “Going forward, we will focus on growing our wallet share in different consumer segments”, CEO Daniel Zhang said in a press release. In the whole retail segment, sales thus ended up ‘only’ falling by 1 %.
Happy with halved profit
By contrast, net profit halved again, even though it had already been decimated by the end of 2021. The net result was 22.7 billion yuan or 3.4 billion euros – still a lot better than had expected. Alibaba proudly reported that most of its e-commerce platforms have become less loss-making thanks to strict cost control and lower investments.
For the rest of the year, Alibaba is counting on a recovery, now that the pandemic seems to be behind us. As logistics normalised, sales also began to recover in late May. “Following a relatively slow April and May, we saw signs of recovery across our businesses in June”, Zhang confirmed. The company is looking to further strengthen its position on the Hong Kong stock exchange this year, especially now that a delisting from the New York Stock Exchange seems imminent.