Chinese retail giant Alibaba is not having the best year in its history. Third quarter sales were disappointing, and its main fourth quarter flagship – Singles’ Day – was more of the same.
Covid and competition
The Chinese e-commerce group that also owns AliExpress, Taobao and Tmall saw its third-quarter sales rise only 3 % to 207 billion yuan (28 billion euros), way below analysts’ forecasts. Moreover, net losses in the three months ending 30 September climbed to 20,5 billion yuan (almost 3 billion euros).
The retailer still suffers from the tough stance on Covid-19 on its Chinese home market: lockdowns not only directly harm sales, but also damage consumer confidence and economic activities. On top of those temporary circumstances, Alibaba sees ever stronger competition by players like Pinduoduo and Douyin (Tiktok), who are increasing their product range and their market share, Reuters reports. In a similar fashion to Alibaba, rival Tencent also came forward with disappointing results this week.
Worse: there seems to be no improvement on the horizon. Contrary to past years, Alibaba refused to report concrete sales figures on its flagship Singles’ Day shopping festival on 11 November. The retailer only mentioned that sales were roughly in line of last year’s. Especially Western brands were very reluctant with huge discounts on the e-commerce platform’s sales holiday.
