Hangzhou, China — Chinese online marketplace Alibaba is cutting costs due to sagging profits according to a report by European retail news website Retail Detail.
“In the new fiscal year, we will focus even more on cost control and continue to improve our operating efficiency,” Daniel Zhang, chairman and CEO, said in a blog post. “This includes streamlining unprofitable businesses, improving cash cycles and enhancing investment efficiency in personnel, fixed assets, and other areas to maintain financial flexibility amidst uncertainties.”
The report notes that Alibaba’s revenues are still growing, but profits have tumbled by 59%, and retail sales have dropped 3.5% in China.
Further hamstringing the brand, Retail Detail notes that Alibaba’s Southeast Asian brand Lazada’s online orders have slowed while European brand AliExpress is facing issues due to amended European VAT rules in which customs charges must be paid on all packages from outside the European Union, as well as impacts from the ongoing Ukraine-Russia conflict.
“Looking ahead to fiscal year 2023, we will firmly focus on generating sustainable, high-quality revenue growth and optimizing our operating cost structure to enhance overall return amidst these uncertain times,” Toby Xu, chief financial officer, said in the company’s Q4 earnings report.
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Thomas Lester is Retail Editor for Furniture Today and Digital/Managing Editor for Home Accents Today. A graduate of Emory & Henry College's Mass Communications program, Lester spent a dozen years working for newspapers in Virginia and North Carolina covering an array of subjects, ranging from community news, government, education, ACC sports, professional baseball and more before joining Furniture Today in 2013. Reach out to me with your story ideas, tips and more at [email protected].
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