China’s Lockdown Spending Boosts Alibaba’s Earnings

Alibaba stock soars after earnings beat, signs of improving conditions amid another COVID-19 wave. Alibaba Group Holding Ltd.’s U.S.-listed shares climbed 14.8% in Thursday trading to record second best single-day performance after the Chinese giant beat revenue and earnings expectations for the latest quarter.

E-commerce giant Alibaba Group Holding reported a 9 per cent increase in revenue for the March quarter, the slowest pace on record, on the back of a slowing economy in China amid ongoing pandemic lockdowns. The Hangzhou-based company, which owns the South China Morning Post, said its revenue reached 204.05 billion yuan (US$32.19 billion) for the quarter, beating the expected 200.6 billion yuan.

Alibaba was able to beat earnings estimates in its latest quarter although the company is facing several challenges related to and impacting supply chains as well as the prevalent consumer sentiment. The company’s shares are up about 4 and 1/2 percent in US trading.

China’s latest lockdowns witness exactly what happened in the US in 2020 and 2021, as people are stuck at home. People had to get their needs via online shopping. So, online malls like Alibaba had the opportunity to flourish.

Chinese e-commerce giant Alibaba said Thursday its profit fell 59 percent in the last fiscal year, joining other tech firms that reported results while grappling with Covid-19 restrictions and a sector crackdown.