Alibaba says China’s slowdown isn’t hurting it all that much

Alibaba Group Holding Ltd. Vice Chairman Joseph Tsai. Photo: Bloomberg

Alibaba Group Holding Ltd. Vice Chairman Joseph Tsai said the e-commerce giant has experienced limited impact from China’s broader economic slowdown as more and more business moves to the internet.

“Our business is delinked” from the Chinese economy because “we’re in e-commerce and we’re digitizing the whole sector,” Tsai said Tuesday at the Goldman Sachs Group Inc. technology conference in San Francisco. Tsai said the company’s growth would continue to outpace the broader economy as digital commerce expands faster than the traditional retail business.

China’s economy expanded 6.4 percent in the last three months of 2018 from a year earlier, according to the country’s National Bureau of Statistics. Alibaba’s revenue rose 41 percent to 117.3 billion yuan ($17.3 billion), though that was the slowest pace in more than two years. While the Chinese economic deceleration is depressing the consumer demand it relies on, the company’s been spearheading a drive into lucrative new spheres such as cloud services and entertainment, while helping modernize physical retailers.

Tsai compared Alibaba’s situation with Amazon.com Inc.’s ability to achieve consistent double-digit sales growth while U.S. economic expansion is projected to slow to about 2.5 percent this year.

He also praised China’s decision to reduce the tax burden for small and micro-sized companies by 200 billion yuan per year for the next three years, to boost those businesses amid the economic downturn.

“In prior cycles the Chinese government would use monetary policy to pump a lot of liquidity into the system,” Tsai said. Now, the government needs to “use fiscal policy, i.e. reducing taxes.” he added, “These SMEs, with more money in their pockets, will be growing their businesses.”

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Bloomberg

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.