Alibaba Seeks Growth Beyond China, Strategic Alliances in Gulf Countries Mark a New Chapter for Tech Giant

Alibaba Group Holding Ltd BABA is actively seeking partnerships with local firms in Saudi Arabia and the United Arab Emirates as part of China’s broader initiative to strengthen relationships with the Gulf countries. 

Alibaba’s president, Michael Evans, highlighted the company’s unique approach to collaboration during a panel at Dubai’s World Government Summit. 

He emphasized Alibaba’s commitment to partnering in local markets, citing recent ventures in the Gulf Cooperation Council (GCC), UAE, and Saudi Arabia as examples of how the company integrates into regional dialogues and developments, Bloomberg reports.

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This strategic move comes as Alibaba aims to recover from a period of regulatory challenges and strategic errors that saw the company lose its leading position in China’s tech industry. 

Co-founder Jack Ma has called for Alibaba to realign its focus, suggesting that local partnerships could be crucial in this process.

The Gulf region’s growing engagement with Beijing reflects its ambition to broaden international influence and attract investments that diversify its economy beyond oil. 

In a significant move towards this goal, the UAE and Saudi Arabia were invited to join the BRICs bloc last year, underscoring China’s influence in the expansion efforts.

However, these deepening Sino-Gulf ties face scrutiny from the United States, particularly regarding entities with close connections to Beijing. In response, Abu Dhabi’s G42, a firm with ties to China, announced its decision to reduce its Chinese operations and commit to investments in Western markets.

Reports indicated China is eying a 2 trillion yuan fund to stabilize stocks, boosting Alibaba and peers as the country reels from an intense regulatory crackdown and a lackluster economy.

In February, Alibaba clocked a third-quarter revenue growth of 5% year-on-year to $36.67 billion, short of the consensus of $36.74 billion. Adjusted earnings per ADS of $2.67 lagged the consensus of $2.69. Alibaba shelved the initial public offerings (IPOs) of its logistics arm, Cainiao Smart Logistics, and brick-and-mortar chain Freshippo. 

Alibaba is amid efforts to augment its position including investing in core businesses to remain relevant amid the intense domestic competition from the likes of PDD Holdings Inc PDD.

Alibaba lost 30% last year. PDD gained 38% last year.

Price Action: BABA shares traded higher by 2.26% at $73.22 on the last check Wednesday.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.