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China’s e-commerce and media giant Alibaba recorded lower profits in the 12 months to March 2022, following a year of turmoil for tech companies, a weakening Chinese economy, a COVID revival and Russia’s war in Ukraine..

Group revenues increased by 19% in the year to March, reaching $135 billion (RMB853 billion). In the fourth quarter, revenues grew 9% to $32.2 billion (RMB204 billion).

Net profits bore the brunt of the difficult conditions and the market value of some of its investments in other companies reduced by some $7 billion. Annual net income was stated as $7.43 billion (RMB47.1 billion), a two-thirds drop. The group’s preferred Non-GAAP profit analysis (which excludes such investment valuations) came in instead at $21.5 billion (RMB136 billion), down by a less alarming 21%.

Alibaba has minority stakes in media businesses ranging from cinema chains to film sales and production companies. It has majority control of the Taopiaopiao movie ticketing platform, the Youku video streaming business, the South China Morning Post newspaper and the separately-listed Alibaba Pictures film production and distribution unit.

The group said that in the March quarter, Youku’s daily average paying subscriber base increased 14% year-over-year “primarily driven by quality content and continued contribution from our 88VIP membership program.” Youku continued to improve operational efficiency “through disciplined investment in content and production capability, which resulted in narrowing of losses year-over-year during the quarter.” But ti did not disclose subscriber numbers.

Revenue from the wider ‘Digital Media and Entertainment’ segment in the quarter ended March 2022, was RMB8.00 billion ($1.26 billion), a decrease of 1%. Quarterly operating losses for the sector fell by 27% to RMB1.97 billion ($310 million).

In the full 12 months between April 2021 and March 2022, Digital Media and Entertainment had a 3% increase in revenues to RMB32.3 billion ($5.09 billion). Quarterly operating losses fell to RMB4.69 billion ($739 million), down from RMB6.12 billion ($964 million).

“Despite macro challenges that impacted supply chains and consumer sentiment, we continued to focus on customer value proposition and building the capabilities to deliver value. We saw tangible progress across our businesses, especially in operational improvements in key strategic areas,” said Daniel Zhang, Alibaba’s chairman and CEO.

Speaking later on a conference call with financial analysts, Zhang gave a cautious insight into his understanding of the changing regulatory landscape.

“The Chinese leaders have shared a very clear message to the market that they want the platform economy to play an important role. in economic development and to encourage the healthy development of the platform economy,” said Zhang. “Alibaba is committed to fulfil our responsibility in terms of helping the development of a better life for consumers and to help the merchants, especially in technology innovation.”

He added: “At the same time we are watching the policy developments to make sure that we are fully compliant with all the regulatory requirements.”