Strict Covid-19 measures have started to affect the revenues of its technology firms now. E-commerce giant Alibaba group has reported flat quarterly revenue growth for the first in its history. Chinese e-commerce giant has enjoyed double digit revenue growth almost every quarter since it went public in 2014. The prospects of Alibaba group were hurt by Beijing’s crackdown on technology firms and scrutiny of founder Jack Ma. The lockdown woes in China that started earlier this year are still biting Alibaba. However, Alibaba’s performance was better than expected and its shares were 4.3 % higher in early U.S. trading. China’s strict lockdowns have hurt its industries including even its gambling hub Macau that underwent strict lockdowns.
Between April and May this year, China locked down dozens of cities as Omicron coronavirus variant spread through the country. Inter- city delivery was stopped and this prevented households from shopping online. All the major cities in China were locked down and harshest restrictions were imposed.
Alibaba’s shares have been falling steadily by two-thirds since 2020. This downward trend for the company started when Chinese regulators abruptly halted the IPO of its finance affiliate Ant Group.
Alibaba’s main growth driver outside of e-commerce is cloud computing and the revenue there was up by 10% while revenue for company’s global division was up 2%. The annual revenue of Alibaba stood at 205.56 billion yuan ($30.43 billion) in the quarter compared to analysts’ average expectation of 203.19 billion yuan. The company has already faced slowing revenue growth in the past year due to weakening economy and stiffer competition from rivals like Pinduoduo and Bytedance.