Alibaba Group Holding Ltd. used to be the brightest star of China’s economic miracle, but its market value has gone down a lot in recent years. This turn of events occurred as Beijing started taking action to slow the expansion of China’s tech giants, which it believed to be growing too quickly. In the first three quarters of last year, the company lost 15,000 employees. It also had to deal with China’s COVID Zero policy and a consumer crisis that tested the country’s economic stability. Beijing’s limits on online shopping, ride-sharing, food delivery, and gaming have had a big effect on how the industry is expected to grow in 2021. The removal of some of its biggest live-streaming influencers over allegations of tax fraud and an 18.2 billion yuan (US$2.6 billion) antitrust fine have hurt Alibaba more than most of its competitors.
For the first time since its IPO in 2014, the company failed to report revenue growth by the April–June quarter of 2022. Alibaba was under less regulatory pressure in China last year, but it still had to contend with fierce rivalry from businesses like JD.com Inc., Pinduoduo Inc., and ByteDance Ltd. Alibaba, however, stands to benefit from China’s economy opening up. Chairman and CEO Daniel Zhang Yong chose the word “jin,” which means leaping forward or seeking progress, as the theme for 2023 in his message to employees. Despite the promising outlook, experts contend that JD.com and other long-standing competitors, as well as short video platforms like Douyin, continue to pose a serious threat.
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The business is additionally having trouble breaking into foreign markets. The Chinese regulatory environment is also difficult because the Chinese government has previously shown a willingness to interfere with Alibaba’s operations. If Beijing forced Alibaba to sell off Ant Group, which owns the mobile payment system Alipay, that would be a very bad thing. Finally, the reopening of China’s economy may act as a potent catalyst to free up latent demand for Alibaba’s struggling e-commerce division. While Alibaba’s glory days, when it could report revenue growth above 30%, may not be back anytime soon, the company is hoping to make a big move and change the course of things in 2023.