Alibaba shares rally 6% after massive earnings beat
Summary
Alibaba shares in Hong Kong closed higher Thursday ahead of earnings, as investors bet that Chinas economic reopening will help boost consumer sentiment and spending, which will ultimately help the e-commerce giant. The drop was driven by a 9% year-on-year decline in customer management revenue, obtained from services such as marketing that Alibaba sells to merchants on its Taobao and Tmall e-commerce platforms. Alibaba said that gross merchandise volume — or the value of transactions across the companys online shopping platforms — "declined mid-single-digit year-over-year, mainly due to soft consumption demand and ongoing competition as well as a surge in COVID-19 cases in China that resulted in supply chain and logistics disruptions in December." Amid a slowdown in its China activity, Alibaba has sought growth in overseas markets through its South East Asia business Lazada and through global e-commerce site AliExpress. "During the past quarter, we continued to improve operating efficiency and cost optimization that resulted in robust profit growth," Toby Xu, chief financial officer of Alibaba, said in a press release.