Categories: eCommerceMarketing

Alibaba Prospects ‘Brighter’ After Long Regulatory Crackdown

Chinese tech giant Alibaba faces brighter prospects in 2023 after two years of regulatory crackdown, as well as pressure from intense competition and slower consumer spending, industry watchers say.

The company was at the forefront of a broad regulatory crackdown that began in late 2020 and sought to bring China’s major tech companies under closer state control.

Since then company founder Jack Ma has largely retreated from public view and spent at least six months of last year living in central Tokyo, where he collected modern art, painted watercolours, frequented private members’ clubs and learned about sustainability, the Financial Times reported last November.

But Blue Lotus Capital Advisors said in a research note it expects “better” performance from Alibaba after a “mediocre” 2022.

Alibaba chairman and chief executive Daniel Zhang Yong speaks at an event in Yiwu, Zhejiang province, in June 2020. Image credit: Alibaba

Regulatory thaw

Factors potentially in Alibaba’s favour include the scrapping of China’s zero-Covid policy, which led to lengthy lockdowns throughout 2022, and renewed gestures of support from the government toward private industry.

As a sign of the new relationship the newly appointed communist party secretary of Zhejiang, Yi LIanhong, visited the Alibaba campus in December.

Frost & Sullivan analyst Carmen Zhu said China’s economic slowdown has taken a toll on advertising commission income from Alibaba’s Taobao and Tmall e-commerce services.

But she noted that the latest quarter showed Alibaba Cloud’s revenues from non-internet businesses accounted for 58 percent of its overall income, indicating the unit is “moving from internet-based businesses to thousands of industries”.

‘Seeking progress’

In his new year message to employees Alibaba chairman and chief executive Daniel Zhang chose the word “jin”, meaning leaping forward or seeking progress, as the theme for 2023, from 2022’s “ding”, meaning holding steady, local media reported.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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