Alibaba (NYSE: BABA) has partnered with Splitit Payments to offer buy now pay later option to AliExpress buyers in Europe. While Australia-listed shares of Splitit surged 22% today on the news, BABA shares closed flat in China.
In its release, Splitit said, “Splitit’s flexible technology platform, coupled with Checkout.com’s payment-acquiring capabilities, enables AliExpress shoppers to pay after delivery with their existing credit card.”
To begin with, the service would be available in Spain, France, and Germany but might be launched in other international markets subsequently.
AliExpress platform connects sellers in China to buyers in international markets. The shipping times can be prohibitive for some buyers though. The shipping times only extended amid the global supply chain issues.
Notably, AliExpress orders have fallen over the last three quarters. To make things worse, Alibaba is also battling a slowdown in China.
Alibaba reported revenues of $29.1 billion in the September quarter which was up 3% YoY. While the sales growth improved from the previous quarter when the Chinese e-commerce giant reported its first YoY fall in revenues, it was nonetheless amongst the slowest growth that it has witnessed. The revenues also fell short of what analysts were expecting.
Amazon’s sales growth also disappointed in the third quarter of 2022. Several analysts lowered their target price on the stock but overall, Wall Street is overwhelmingly bullish on the stock. Many brokerages have listed Amazon stock as a top 2023 idea. We have a guide on how beginners can buy Amazon stock.
Alibaba Stock is Outperforming in 2023
Last year, Alibaba stock fell to multi-year lows. However, the stock has rebounded sharply from the lows. On the macro level, there has been a rally in Chinese shares after the country abandoned the zero-COVID policy. Also, the country has given ample signs of rapproachment with investors after the tech crackdown.
The China Banking and Insurance Regulatory Commission approved Ant Financial’s request to more than double its registered capital for the consumer unit. Alibaba holds a third of the stake in Ant Financial.
Ant Financial was set to go public in 2020 and received bids above $3 trillion. The company was looking to raise around $34 billion from the IPO which would have valued the fintech giant at around $310 billion.
However, Chinese regulators blocked the IPO at the last moment. Notably, Ant Financial’s founder Jack Ma made critical comments against the country’s regulators ahead of the IPO. It is not common for business leaders to criticize regulators of Communist party officials in China.
Alibaba stock fell after China blocked Ant Financial IPO. The listing of the fintech giant would help Alibaba unlock value.
China Allowed Ant Financial to Raise Capital
Ant Financial has also been working for months with Chinese regulators to restructure its business. The permission to raise more capital for the consumer business is a step in the right direction for Ant Financial.
This would also pave the way for an eventual IPO of the company. We have a list of some of the upcoming IPOs in 2023.
Notably, China’s image as an investment destination and manufacturing powerhouse took a beating from the tech crackdown and stringent lockdown measures. Alibaba especially bore the brunt and in 2021 it paid a record $2.8 billion fine to settle the antitrust case.
Several foreign companies have been looking to diversify their sourcing from China to other Asian countries. Apple is planning to diversify its sourcing to countries like India and Vietnam. India is offering incentives to electronics manufacturers as the country seeks to capitalize on the “China plus one” sourcing strategy that many US companies are contemplating.
Indian stocks outperformed global markets in 2022 amid a strong domestic economy. We have a guide on how beginners can buy stocks in India with a regulated broker.
Analysts See More Upside for Alibaba Stock
Alibaba stock has jumped from its 2022 lows. However, many Wall Street analysts still find the stock attractive. There is a guide on buying Alibaba stock.
US Treasury Secretary Janet Yellen is set to meet Chinese finance minister Liu He in Zurich on Wednesday. Last year, China struck a deal with US regulators that would help prevent the forced delisting of Chinese companies from the US markets.
China has allowed US regulators to audit the books of US-listed Chinese companies failing which they would have been delisted. Alibaba was among the Chinese stocks that faced a possible delisting in the US.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.