But the company ended up spending a record amount in 2018 — something that the market was happy with. Over 278.8 billion yuan, or $41.6 billion, was spent on product development, sales and marketing, general administration and cost of revenue last year, a 86.2 percent increase in renminbi terms from 2017, when the company splashed out 149.7 billion yuan.
“Ali appears more disciplined in its spending on operating-related expenses, though top management suggested they are not withdrawing from investing in those strategic businesses,” Nomura said in a research note released Thursday.
Those “strategic businesses” include what Alibaba calls “new retail” — a term it uses to describe the way it can integrate all its services from payments to logistics to bricks and mortar stores in order to create a shopping “ecosystem.”
“It’s all about how to integrate online and offline to transform to a whole digitalized commercial world,” Alibaba CEO Daniel Zhang told CNBC in an interview last year.
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