On Thursday, China’s e-commerce giant Alibaba Group Holding Ltd reported its first quarterly operating loss, the first since going public in 2014. The operating loss the company suffered was major as a result of the anti-monopoly fine it was hit with.
Alibaba has been in some serious conundrum of late, with serious heat from the Chinese government. It is well known that Alibaba and the businesses under its umbrella have been under the scrutiny of the Chinese Government, especially after Jack Ma criticized the Chinese Government. Alibaba is a Chinese multinational technology company and specializes in services relating to e-commerce, technology, internet, and retail. The company provides customer-customer, business-to-customer, and business-to-business sale services via its web and mobile app outlets. The company also involves in cloud computing services, electronic payment services, and shopping search engines, and was founded about twenty-two years ago on the 28th of June, 1999.
The company’s U.S. listed shares went down by almost four percent in volatile pre-market trading. The company has earlier forecasted that its revenue would exceed all market expectations as a result of the shift to online shopping and online services after the coronavirus turned into a pandemic and kept everybody at home. This forecast has been, however, brought to the ground by a $2.8 billion fine for anti-competitive business practices and the suspension of a $37 billion IPO of its subsidiary Ant Group. The fine placed on the company for anti-competitive business practices is the most severe of its kind to be given to any business by Chinese regulators.
“In the past fiscal year we’ve gone through all kinds of challenges, including the Covid-19 pandemic, fierce competition, as well as an anti-monopoly investigation”, the company’s CEO; Daniel Zhang said while also adding that the company has accepted the antitrust penalty with sincerity, and going forward will ensure strict compliance.
Alibaba revealed that net loss ran into 5.48 billion Yuan, or $1.99 per American Depository Share (ADS), and was major as a result of the anti-trust fine it was hit with. The company saw a 72 percent increase in core commerce revenue to 161.37 billion Yuan; this can be attributed to the pandemic and shift to online shopping.
According to Reuters, the company’s U.S. listed shares have gone down more than 30 percent since hitting a record high in October of last year and came after Jack Ma criticized Chinese regulators.