Alibaba’s first operating loss since its IPO comes after it was fined $2.78 billion as part of a push by regulators to rein in digital platforms that have unprecedented influence over the lives of hundreds of millions of Chinese consumers.
Chinese e-commerce giant Alibaba has said it fell to a $1.17 billion operational loss in its latest financial quarter due to a record fine levied by the government for anti-competitive practices.
The Hangzhou-based company was fined $2.78 billion (18.2 billion yuan) last month as part of a push by regulators to rein in dominant digital platforms that have achieved unprecedented influence over the daily lives of hundreds of millions of Chinese consumers.
Alibaba Chairman and CEO Daniel Zhang: “Against the backdrop of the macroeconomic recovery and accelerated digitalization in China, Alibaba achieved healthy growth across all businesses." $BABA— Alibaba Group (@AlibabaGroup) May 13, 2021
Alibaba said that its business continued to post solid growth and that without the hole blown in its finances by the fine, it would have posted an operating profit of $1.6 billion, up 48 percent.
Alibaba, Tencent, JD.com and other big tech players became hugely profitable on growing Chinese digital lifestyles, plus government restrictions on major US competitors in the domestic market.
But concern has risen over their influence in China, where tech-savvy consumers use them to communicate, shop, pay bills, book taxis, take out loans and perform a range of other daily tasks.
Alibaba has faced special scrutiny after billionaire co-founder Jack Ma publicly criticised Chinese regulators in October for reining in a push into online lending, wealth management and insurance products by Alibaba's online payments arm Ant Group.