Alibaba has faced growth challenges amid regulatory tightening on China’s domestic technology sector and a slowdown in the world’s second-largest economy. But analysts believe the e-commerce giant’s growth could pick up through the rest of 2022.
Kuang Da | Jiemian News | VCG | Getty Images
Alibaba said it will invest $1 billion over the next three fiscal years to support its cloud computing customers as the Chinese e-commerce giant looks to reignite growth after a historic slowdown.
In a press release on Thursday, Alibaba said the investment consists of “financial and non-financial incentives, such as financing, discounts and market entry initiatives.”
The company said it is also setting up a program to help its customers localize their cloud computing business needs depending on the market.
Alibaba is the third largest cloud computing company in the world after Microsoft and Amazon, according to Gartner. While cloud computing is a small part of Alibaba’s overall business currently, the company’s management sees it as a critical component of future growth and profitability.
However, Alibaba experienced an unprecedented slowdown in growth amid China’s economic malaise due to the resurgence of Covid in the world’s second largest economy and a tighter domestic regulatory environment. In the April-June quarter, Alibaba reported its first-ever steady revenue growth.
Revenue growth in the cloud computing business also slowed from the previous quarter.
Alibaba’s investment announcement is also part of a broader push from Hangzhou, the China-based company to expand its cloud computing business overseas.
Over the past few years, Alibaba has opened new data centers outside of China to gain customers in other markets such as Singapore and Thailand.