September 18, 2022
Chinese Technology Companies Weakest Growth in History, YT Trending - Latest Technology News

Beijing’s uncompromising measures to combat coronavirus outbreaks, as part of a zero-tolerance policy for COVID, have caused a significant slowdown in the Chinese economy. Due to the government’s strict sanitary regulations, major Chinese technology companies saw a significant drop in sales. As a result, they experienced the worst quarterly growth in their history.

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For the first time in its history, e-commerce giant Alibaba saw no year-on-year quarterly revenue growth, while Tencent, owner of the WeChat messenger and one of the world’s largest gaming companies, reported its first-ever sales decline.

Chinese technology companies were hard-hit by lockdowns, recording the weakest quarterly growth in history.

“Retail sales fell year on year in April and May.” Because of the resurgence of Covid-19 in Shanghai and other major cities. And has gradually recovered in June,” Alibaba CEO Daniel Zhang said on the company’s earnings call this month.

JD.com, China’s second-largest e-commerce firm, reported its slowest revenue growth in history. Xpeng, an electric vehicle manufacturer, reported a larger-than-expected quarterly loss. And a lower-than-expected analysts forecast for the following quarter, promising 29,000 to 31,000 vehicles. These companies have a combined market capitalization of more than $770 billion.

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“What I find interesting is how the narrative on the big tech companies… has changed: early in the pandemic, COVID was expected to benefit the big online platforms at the expense of ‘offline’ businesses, as much of the economy would be stuck at home with little else to do but shop online and entertain themselves online,” Tariq Dennison, wealth manager at GFM Asset Management, told CNBC.

Chinese Technology Companies Weakest Growth in History, YT Trending - Latest Technology News

Last quarter, China saw an increase in coronavirus cases. Authorities imposed lockdowns in major cities to prevent the spread of the pandemic. Including Shanghai, which lasted several weeks and included mass testing of the population.

China’s economy grew by 0.4% in the second quarter, as evidenced by consumer demand and corporate spending on advertising and cloud computing.

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