Despite new record December quarter revenues announced yesterday, Chinese e-commerce giant Alibaba Group disappointed shareholders as it stayed behind expectations, having exhibited only sluggish growth over the past years. In 2023 specifically, the company was caught up in a restructuring effort, received a new CEO in September and has seen some of its core Chinese e-commerce platforms, Taobao and Tmall, struggle with even lower growth than the company average. The announcement that Alibaba was pulling two more IPOs - for its logistics arm and its grocery business - contributed further to the lack of trust in the business and led to stocks taking a nosedive Wednesday. A spin-off of its cloud business was already shelved in November as chip trade restrictions and a poor business climate in China are attacking the company on multiple fronts.
Alibaba's stock performance had been poor before this week's announcement, however, causing the company to fall behind its domestic rival Pinduoduo recently. As cloud computing and Chinese e-commerce are showing poor growth, international sales for Alibaba - for example via platforms like AliExpress or Lazada - have grown quickly at an increase of 44 percent in the December quarter compared to one year earlier. But Pinduoduo is also attacking Alibaba in this market, having launched its international platform Temu to great success.
The company said it is sticking to its stock buyback plan, increasing it by $25 billion to $35.3 billion. Alibaba's headcount was down a further 20,000 in 2023, the release revealed, as it is struggling to find its place amid strong competition from newer upstarts both domestically and internationally, also including strong e-commerce pushes on TikTok-clone Douyin and in the social media field in general.
