Alibaba is coming off another great quarter and saw record sales during its Singles Day promotional event. It reported Q3 sales of $23.2 billion — growth of 38% — and reported earnings per share of $2.61. That beat expectations of $22.9 billion in revenue and EPS of $2.28 per share.
But the company’s stock is trading relatively flat so far in 2020, trailing the S&P 500, which has seen a 3.5% gain. That’s because of fears of the coronavirus, which emerged in December in China and has since infected more than 70,000 around the world. More than 2,000 have died, most of them in China. The death toll already surpassed the 2003 SARS virus, which also began in China and infected more than 8,000.
Zhang told reporters that Alibaba is already seeing changes in buying patterns, particularly in deliveries with electronics and clothing. The company will also see a downturn in travel bookings and restaurant orders, which will hurt Alitrip and its delivery business.
Last year, China’s economy expanded by 6.1%. And while that’s Beijing’s slowest growth rate in 30 years, it still beats the United States, which saw an expansion of less than 3%.
Alibaba began trading last November on the Hong Kong stock exchange for the first time, grossing $13 billion from that IPO. The company plans to use revenue from the Hong Kong listing to drive its user growth and engagement strategies, giving Alibaba an even bigger advantage in the e-commerce field.