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Alibaba
TechTech Trends

China Big Tech in 2023: Alibaba sees better days ahead after China’s Covid opening, easing of regulatory pressure

  • Chairman and CEO Daniel Zhang Yong has chosen the word jin, which literally means leaping forward or seeking progress, as the theme for 2023
  • Alibaba’s rapport with the Chinese government – in particular local authorities – quickly fizzled out amid Beijing’s regulatory scrutiny

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The mascot for Alibaba’s Taobao e-commerce platform at the company’s affiliated hotel in Hangzhou, China, Aug. 2, 2022. Photo: Bloomberg
Tracy Quin Shanghai

Alibaba Group Holding, which has been hit by weak consumer spending, brutal competition and heavy regulatory scrutiny over the past year, looks set for a brighter 2023 amid China’s Covid reopening and Beijing’s fresh promises to support the private economy, analysts said.

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While the Hangzhou-based e-commerce giant created by Jack Ma has shelved former lofty goals such as “becoming the world’s fifth largest economy”, its deep reach into 1 billion Chinese consumers through its Taobao and Tmall online platforms will ensure it emerges a winner from a broad economic recovery.

Company chairman and CEO Daniel Zhang Yong has chosen the word jin, which literally means leaping forward or seeking progress, as the theme for 2023, from 2022’s ding, which means holding steady or remaining calm, according to his new year message to employees. Alibaba owns the South China Morning Post.

“Alibaba’s performance in 2022 was mediocre, without many highlights, but we are expecting their performance will be better next year,” said Shawn Yang, managing director at Blue Lotus Capital advisers.

Alibaba experienced a rough ride over the past two years after Beijing decided to clip the wings of the country’s Big Tech firms in the name of curbing “disorderly expansion” of capital. It was slapped with an 18.2 billion yuan (US$2.6 billion) antitrust fine for “monopolistic behaviour”, while some of its biggest live-streaming influencers were removed due to alleged tax fraud.

The company’s market capitalisation has lost two thirds from its peak in October 2020, and is now just a quarter of Amazon’s – a far cry from five years ago when the market value of Alibaba exceeded that of Amazon. In the first three quarters of 2022, Alibaba’s workforce shrank by about 15,000.

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Carmen Zhu, senior analyst at research firm Frost & Sullivan, said the slowdown in domestic economic growth and weak online consumption has taken a toll on Taobao and Tmall’s advertising commission income.

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