You must be aware that the global economic situation is such that while no one is ready to call it just yet, it is known that there is a recession looming over everyone’s heads. Already, there have been millions of job cuts across the companies related to e-commerce, technology and other sectors and that is a clear indication that there is an economic slowdown which could lead to a recession in the coming months as well. One reason why no one wants to announce that there is a recession is because of the effect it can have on the markets globally. However, if the growth goes into negative then there is no option left but to announce that we are in a recession.
This is one reason why people all around the world are being very cautious with their money, and this is precisely what Alibaba is suggesting as well. The company says that Chinese e-commerce shoppers were very cautious with their money so far this year. While this is a sign that people are worried about the economy, it does not go down well for e-commerce companies that rely on people spending more. Due to that reason, we reported that China’s JD is spending $1.4 Billion on giving discounts so that people are forced to buy stuff from them.
Alibaba CEO Daniel Zhang said, “From January to early February of this year, overall sales of online physical goods remained weak,”. He added, “Our China commerce continued to be highly impacted due to Covid cases as well as people traveling home or to other places during the Spring Festival holidays,”. Zhang mentioned that they saw a recovery in apparel, sports and outdoor products after the COVID wave and it could be because the lockdowns were lifted and people started to spend much more time outdoors.
As seen everywhere else around the world, Alibaba’s CEO also says that “What we see across all merchants is a strong desire to get back to business. They want to have a bumper year in 2023 to make up for everything they lost over the past three years.”