One year after the launch of a digital Chinese mastodonte regulation campaign, the e-merchant saw its profits drop by 81%.
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Alibaba had not published results down for five years. But the year 2021 was particularly black for the Chinese online commerce giant, struck by a series of sanctions and reminders to order. After two satisfactory quarters, Chinese growth also boomedly breathless from the summer, weighing on sales one of the sales number. The Group announced in a statement that its profits had melted from 81% for the three months of July to September, to 5.37 billion yuan (741.5 million euros), against 28.77 billion at the same period In 2020. In response, its course fell 11.13%, Thursday, November 18 at Wall Street.
The record sales of the company on the occasion of the “Single Festival”, on November 11, did not suffice to reassure investors. The turnover of its online business activity has certainly increased by 31%, a little below the forecasts. But it is on the marketing expenses of the signs, namely the costs incurred to be better referenced by the platforms, that the group realizes most of its profits. However, they gained 3% in one year.
Numerous regulatory measures
Alibaba has also lowered its growth forecast for 2021, 29.5% by encrypting between 20% and 23%. In issue, increased competition from other actors such as PinDoduo, which has more active users than Alibaba, especially in smaller cities, or that of its historic rival, JD. com. Not to mention newcomers like Kuaishou and Douyin online video platforms, the Chinese version of Tiktok, which aspires a growing part of the marketing budget. While Alibaba controlled 78% of online sales in China in 2015, it would only capture 47.1% of the market in 2021, according to a Study of the cabinet emarketer published in July. However, the cake continues to grow by 20% per year, for a total of around € 1,850 billion, the empire of the environment weighing 52% of world online business.
On the other hand does not make any reference to the main black point for the company: the numerous regulatory measures it has suffered after the annulment of the IPO of the ANT, its financial subsidiary, in November 2020. Since then, Alibaba had to pay a record of 2.3 billion euros for abuse of dominant position and review some of its practices, which impose exclusivity to its merchants. Other sectors have also been resumed in hand, such as entertainment or online education, affecting other champions like bytedance (tiktok) and Tencent, world number one video games.