Due to figures that showed China's growth rate has been slowing down, some investors fear that Alibaba's stocks will lose momentum. A new report suggested that the Chinese tech giant can overcome this ordeal due to increased consumer demand and investments outside of China that promise great returns as e-commerce continues its upward hike.
In his latest entry for Investorplace, financial blogger Rohit Chhatwal noted that Alibaba has a list of new services that could help the Hangzhou-based tech firm deliver 40 to 50 percent in revenue growth. These services cater to consumer demand, thus making more room for growth.
Aside from Alibaba's transition to specialized online platforms in its home country, the retail giant also has shown significant growth in its cloud platform in Q4 2018 with an 84 percent record. Revenue shares in this particular department recorded 6 percent growth.
Chhatwal stressed that the mentioned factors will affect growth in Alibaba's stocks for the coming term, despite the company's low overall valuation due to the slowing economy in China.
While some economists fear that China's GDP issues could affect share prices in Chinese companies, Chhatwal noted that Alibaba's growth is not closely tied to the Chinese economy in broader terms. Compared to JD.com, the Jack Ma-founded firm is still growing consistently better.
Furthermore, Alibaba's expansion in the investment industry has been progressing, particularly in its partnership with Ele.me. This joint venture in food delivery has extended its reach to the coffee delivery sect and could expand further to other sectors.
Experts predicted that the tech company's growth potential is big enough to pull up stock prices since it has been investing billions and has also started acquiring promising businesses including Lazada.
Lazada is a Southeast Asian, Singapore-based e-commerce company that Alibaba invested an additional $2 billion in earlier last year. CNBC News reported at that time that the Chinese retail mammoth increased shares from 51 percent to 82 percent from the billion-dollar investment.
The initial investment of $1 billion was delivered in 2016. Analysts foresee that this investment, along with others, will haul in profits for Alibaba in the coming years, considering that Lazada is dominating Southeast Asia including Vietnam, the Philippines, Thailand, Malaysia, and Indonesia.
Alibaba's investments outside its home turf are some of the factors that confirm its partial detachment from China's economy. Also, the company's cloud computing ventures are believed to be a key driver for potentially increased stock margins.
