Alibaba Q2 - Hit by Trade War

Alibaba has over 600 million customers around the world. Last week this Chinese tech behemoth reported quarterly results. Revenues grew by 54% to $12.4bn, $10.5bn of that was from retail. The rest came from cloud computing, digital media and entertainment.

Often referred to as the Amazon of China, Alibaba is slightly different in that they are mostly a market place. They don't sell much of their own stuff. For example, Amazon often uses their sales data to create competing products to the best sellers on their platform. Alibaba, on the other hand, shares this data with merchants so that the merchants can boost their own sales. Amazon is a retailer, Alibaba is a platform.

With a Chinese middle class expected to reach 850 million as well as an expanding global business, Alibaba sounds like a no brainer. However, with the recent trade wars and the Chinese market taking some heat, the Alibaba share price has fallen 29% from its highs.



I would say this presents a decent opportunity for those who believe China will continue to thrive and that these trade wars are a mere orange blip on their road to success.