Alibaba Posts First Loss Since Going Public After Antitrust Fine


Alibaba Group Holding Ltd.


BABA -6.28%

posted its first-ever quarterly loss because it went public after being hit by a file antitrust high-quality in China and pledged to take a position future income into enhancing its enterprise and avoiding competitors.

Over the previous 12 months, the Chinese e-commerce firm has been below strain from each encroaching opponents and an antitrust investigation, which dominated that Alibaba had abused its dominant market position. In a Thursday earnings name, Chief Executive Daniel Zhang stated the corporate would give attention to bettering its platform following the high-quality.

“We have gone through all kinds of challenges including the Covid-19 pandemic, fierce competition as well as the antimonopoly investigation and the penalty decision by Chinese regulators,” Mr. Zhang stated. “We believe the best way to overcome these challenges is to look forward and invest for the long term.”

Mr. Zhang stated any income this fiscal 12 months that surpassed final 12 months’s determine would go towards areas together with enhancing consumer development and engagement, service provider help, infrastructure and logistics.

For the quarter led to March, Alibaba’s internet loss attributable to unusual shareholders was 5.5 billion yuan, equal to $836 million, in contrast with a internet earnings of three.2 billion yuan in the identical interval a 12 months earlier. Its gross sales rose 64% to 187.Four billion yuan, equal to about $28.6 billion, beating analyst expectations.

In April, China’s State Administration for Market Regulation levied a $2.eight billion high-quality in opposition to Alibaba, equal to 4% of the corporate’s home annual gross sales. The regulator stated its investigation, launched in December, discovered that the corporate punished sure retailers who bought items each on Alibaba and on rival platforms, a follow referred to as “er xuan yi”—actually, “choose one out of two.”

“We believe the self-reflection and adjustment we’ve made will help us to better serve our community of consumers, merchants and partners, and position us well in the future,” Mr. Zhang stated.

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Alibaba additionally has taken steps to court docket retailers, slicing charges and making it simpler for them to open shops on its e-commerce platforms. Mr. Zhang stated on Thursday that the corporate was engaged on extra measures to help vendors on its platform.

The announcement of Alibaba’s penalty marked the tip of a interval of uncertainty for the corporate and its traders, although Beijing officers have continued to take a hard-line stance in opposition to China’s expertise giants and any potential regulatory infractions. Alibaba might additionally be forced to sell off its media assets, The Wall Street Journal beforehand reported.

In the present fiscal 12 months, Alibaba, which went public on the New York Stock Exchange in 2014, expects its income to develop no less than round 30% to greater than 930 billion yuan, in contrast with the earlier 12 months’s development of 41%.

Alibaba has striven to keep up market share in its core e-commerce enterprise as new upstarts corresponding to five-year-old Pinduoduo and in style short-video platforms have grown their very own consumer bases. On Thursday, the corporate reported that annual energetic customers on the finish of March surpassed one billion, with 891 million of these in China.

Pinduoduo, which efficiently drew in patrons via gamification and low cost offers, stated earlier this 12 months that it had edged previous Alibaba in annual energetic customers with 788 million at the end of 2020.

Alibaba has its personal competing app Taobao Deals, providing lower-priced items. On Thursday, the corporate stated 70% of latest energetic customers got here from much less developed areas, signaling inroads in lower-tier cities and rural areas.

For Ant Group Co., Alibaba’s beleaguered financial-technology affiliate, revenue grew about 41% for the quarter ended Dec. 31 from a 12 months earlier regardless of regulatory scrutiny. Ant generated an estimated quarterly revenue of 21.eight billion yuan, equal to $3.Four billion, primarily based on the Journal’s calculations from Alibaba’s disclosures.

During the interval, the Chinese authorities called off Ant’s blockbuster initial public offering that had been on observe to be the world’s largest inventory sale and subsequently ordered Ant to revamp its companies.

In lower than six months, China’s tech big Ant went from planning a blockbuster IPO to restructuring in response to strain from the central financial institution. As the U.S. additionally takes purpose at huge tech, right here is how China is shifting sooner. Photo illustration: Sharon Shi

Ant, which owns the favored cost and way of life app Alipay, has in latest months been coming to grips with a bevy of latest rules, together with turning itself into a financial-holding company overseen by the central financial institution. The designation would topic Ant to guidelines much like these governing banks and cloud the corporate’s development prospects.

Alibaba owns a 3rd of Ant and stories its share of income from the online-payments firm with a one-quarter lag. Company executives made no touch upon Ant on Thursday’s name, the primary after China’s central financial institution issued directives final month on the way it needed Ant to rectify its businesses.

Since Ant and Alibaba fell into Beijing’s regulatory crosshairs, the outspoken co-founder Jack Ma largely disappeared from public view, except for a handful of video appearances. He resurfaced earlier this week at Alibaba’s Hangzhou headquarters to attend an annual company celebration referred to as AliDay.

Write to Stephanie Yang at stephanie.yang@wsj.com and Jing Yang at Jing.Yang@wsj.com

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