Alibaba is ready for a trade war



Jack Ma: Globalization is experiencing growing pains

The Chinese e-commerce giant Alibaba does not want a trade war.

But the company said Thursday that China would not only survive a fight with the United States, it would also thrive.

And Alibaba too.

Alibaba (BABA) Vice President Joseph Tsai told analysts during a conference conference call Thursday: "If American goods become too expensive due to rates, Chinese consumers can switch to domestic producers or import from other parts of the world."

Tsai's remarks only came a few hours after the US and China each implemented a second set of rates for $ 16 billion in goods.

"We believe that Chinese government policy will continue to support imports into China to meet the growing demand from Chinese consumers," said Tsai.

Nobody wins during a trade war, but …

Tsai added that Alibaba does not want trade talks to deteriorate further, but it is prepared for the worst case scenario. Alibaba would have no problem finding customers in other markets if the United States suddenly becomes a more difficult place to do business, he said.

"In terms of our international expansion, the world is a big place and we have made significant progress in emerging markets such as Southeast Asia and South Asia, as these markets are ripe to add more consumers to our ecosystem," Tsai said.

Tsai added that over the years China has become less dependent on exports and that the economy is resistant to Chinese products. He made similar remarks after the company reported in May.

But Alibaba still has global ambitions. Founder and CEO Jack Ma has repeatedly said that Alibaba wants to do more business with major American brands. A number of American companies already sell products on the Taobao and Tmall websites of Alibaba.

Jack Ma: Globalization is experiencing growing pains

American supermarket leader Kroger (KR) just put a store on Tmall.

Alibaba recently also signed a deal with Starbucks to sell coffee on its Ele.me delivery platform.

Tsai said the Starbucks (SBUX) deal shows Alibaba "working constructively with American brands to better serve Chinese consumers."

Tsai also suggested that some American workers might even be hurt if a full trade war develops.

"If you look at Alibaba's presence in the United States, our focus is on helping American farmers and small businesses sell their products to Chinese consumers," Tsai said.

Solid sales in the cloud

Trade war concerns do not seem to have a major impact on Alibaba. The company reported sales that were above forecast, led by an increase in retail sales of more than 60%.

Stocks initially rose in early trading Thursday, but the shares gained their profits as the day progressed.

Alibaba is also a budding leader in cloud computing, a lucrative company currently dominated by Amazon & # 39; s (AMZN) AWS unit, Microsoft & # 39; s (MSFT) Azure and Alphabet (GOOGL) Google Cloud.

The cloud sales of Alibaba almost doubled compared to a year ago and the company wants to host websites for more companies, including American companies.

CNNMoney (New York) First published on August 23, 2018: 11:03 AM ET


Source link

Leave a Reply