As I said before, the “tech crackdown” will be good for BABA because capitals are withdrawing from competition and BABA will emerge stronger. Layoffs are occurring across the whole section.
https://www.yahoo.com/finance/news/chinas-big-tech-firms-sen…
including at BABA
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BABA spent lots of money on “new retail” and “taobao deal” to sign up new low-end customers to fend off competition from PinDuoDuo etc. Now that phase is over, BABA cut back on those spending and also started layoffs. They announced in the last quarter earning call that they would focus on serving existing customers well. Expect profit margin to improve in the next few quarters.
Now that phase is over, BABA cut back on those spending and also started layoffs.
If your argument is that Chinese tech companies have no place to deploy cash, and with the government cracking down, they are taking a pause on empire building and going to return cash to shareholders, that’s the same point I made sometime back.
But somehow that is unique to BABA is called “commitment bias”.
<<If your argument is that Chinese tech companies have no place to deploy cash, and with the government cracking down, they are taking a pause on empire building and going to return cash to shareholders, that’s the same point I made sometime back.
But somehow that is unique to BABA is called “commitment bias”.>>
It’s more like Amazon spending money to compete with some new startups to attract a certain segments of consumers. When it’s over, those new startups will either stop growing or fade away, and Amazon will be let alone.
Driverless cars, Machine Learning, AI, IoT, 5G,… US tech firms are not reducing their investment… just saying.