Chinese market is slowing down, which was indicated clearly by a reported growth of 7.4% in 2014, which is the lowest in the last 24 years. Alibaba Group Holding Ltd (NYSE:BABA) relies heavily on the Chinese market and the question arises, if the slowing Chinese economy would impact the company’s growth in the future. Raymond James Senior Internet Analyst Aaron Kessler talked on CNBC about his thoughts on slowing Chinese economy and its impact on Alibaba Group Holding Ltd (NYSE:BABA) stock.
Kessler feels that there is no impact of slowing Chinese economy on Alibaba Group Holding Ltd (NYSE:BABA) in the near term. He said that eCommerce business is still very strong in China. He pointed out that the offline market is not very well developed in China, which gives more potential for Alibaba Group Holding Ltd (NYSE:BABA) to grab more shares of online market.
Tmall global is Alibaba Group Holding Ltd (NYSE:BABA)’s shopping platform for global customers. The recent reports suggested that Tmall global isn’t a big success. Kessler said that Tmall is growing very strongly in China as global and US brands are slowly entering Chinese market through Tmall. But he feels that Alibaba Group Holding Ltd (NYSE:BABA) has launched Tmall in a big scale in global markets like US and Europe. He pointed out that there are some speculations which says that Alibaba Group Holding Ltd (NYSE:BABA) might acquire eBay Inc (NASDAQ:EBAY) to get a strong hold in the US market. Kessler also talked about Alibaba Group Holding Ltd (NYSE:BABA)’s earnings and he pointed out that he is expecting very strong earnings.
“I was looking for strong results from Alibaba, roughly 40% topline growth, similar bottom line growth […]. In terms of decoupling, Yahoo at some point is going to have to look to sell the remaining shares. Big question mark in Yahoo is, can they get a tax efficient deal,” Kessler said.
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