Alibaba has posted 9% revenue growth ($30 billion) but claims Beijing’s strict pandemic restrictions are continuing to hinder the brand.
The results mean that Alibaba has outstripped its tech rivals Tencent and Baidu.
Alibaba CEO Daniel Zhang has claimed that lockdown restrictions have bogged down the company’s logistics division and its supply chain.
Consumer demand for non-essentials has also waned as a result of the tight restrictions deployed by China.
This has meant that despite the 9% increase, the company’s revenue has shrunk to a low single-digit percentage in April compared with a year earlier, noting the situation had improved in May.
“We believe operating stability and sustainability during this period is the primary concern of all businesses,” said Zhang.
The results come a day after Chinese premier Li Keqiang issued a bleak warning on the country’s economic turmoil to tens of thousands of officials during an internal videocast, pleading with them to take action to restart an economy paralysed by Covid lockdowns, the Financial Times reported.
Alibaba’s New York shares are now trading below the closing price of its first trading day in 2014. Its US shares were up more than 10% in early trading.
Tougher competition from the rest of the sector has also helped to bog down Alibaba, with companies such as Pinduoduo and JD.com both making gains alongside ByteDance’s TikTok sister app, Douyin, which has boomed as influencers sell goods via livestream.
Alibaba has also pushed its livestream sales however its most popular influencer Viya, a social media star who sold ¥31 billion of goods in 2020, disappeared from the internet in December after local tax authorities fined her for under-reporting her income.
Overall, Alibaba reported a net loss of ¥16 billion in the first quarter, primarily because of the falling market prices of listed investments. Operating income rose to ¥17 billion.
Alibaba’s Toby Xu stressed that the ecommerce behemoth would work to control costs in the coming year, but declined to give a full-year revenue forecast given the uncertain nature of the sector.
“The parts of the business that aren’t generating long-term value we will find ways to make them more efficient or scale them down,” he said.