By CHENG Lu
Sales at Alibaba grew by only 9 percent year-over-year in Q1. Due to lockdowns, e-commerce GMV didn’t grow in March, for the first time in Alibaba’s history. In April it fell by a further 10 percent.
Direct sales (as compared to sales from third parties) increased 14 percent to 73 billion yuan (US$10.9 billion), driven by Hema (grocery) and Tmall Supermarket. EBITA decreased 29 percent, with margin down from 30 percent last year to 23 percent, blamed on increased inventory and supply chain costs.
Growth in retail sales outside China slowed as brick-and-mortar businesses reopened in Southeast Asia, but Lazada nevertheless grew by 32 percent. International wholesale (mainly Alibaba.com) brought in 4.4 billion yuan, a 13 percent increase from last year. International commerce as a whole lost 2.6 billion yuan, mainly due to investment in new business and losses in Turkey.
Outperforming everything else was local consumer services (food), which grew 29 percent in revenue despite the impact of restaurant shutdowns on Ele.me (food delivery). Losses narrowed as marketing and operations become more efficient.
Alibaba will focus on controlling costs and improving returns in the next few quarters, said Chief Financial Officer Toby Xu. This includes scaling down “businesses that aren’t generating enough long-term value,” and setting different efficiency targets for different operational areas.
