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Is Alibaba Group Holding Ltd’s Job Promise A Sign Of The Slowing Chinese Economy? (BABA)

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Alibaba Group Holding Ltd ( BABA ) executive chairman and founder Jack Ma promised U.S. President Donald Trump earlier this month that he would create one million jobs in the U.S.

However, some experts see this as a move to expand Alibaba's revenue sources amid slow growth of the Chinese economy, according to Yibada .

Slowing Economy in China

Alibaba President Michael Evans suggested that the idea is to link Chinese online buyers with small businesses in the U.S. Evans said that they understand the power of connecting small businesses to consumers and the leverage it gives small business to hire more people.

"For the next five years, it's going to be a business priority and focus in the U.S.," Evans said.

Previously, Ma said that he was aiming to get more than half their sales from overseas markets by 2025, along with talk of expanding in America. Bloomberg reported in the last quarter the online retail giant did well in the overseas market.

However, the China-based online retailer is facing a slowing economy at home.

According to Bloomberg, the Chinese economy is expected to decline to 6.4%, despite growth of 6.7% in its GDP last year. In the past year, Alibaba's growth has slowed down a little, but its stock still beat expectations at the New York Stock Exchange.

Alibaba Diversifying Revenue Sources

Alibaba has diversified its revenue sourcing and has persuaded U.S. mega-retailers Costco Wholesale Corporation ( COST ) and Macy's Inc ( M ) to open online shops. The Chinese firm has even signed a $2.6-billion privatization deal with Intime Retail Group Co . and expanded its efforts to reach out to medium and small-sized enterprises, says Yibada.

Nearly 650,000 American companies are already registered on Alibaba.com. The Chinese firm also aims to send out recruiters across America to attract more businesses and tell them about the potential in cross-border retail e-commerce in China, which is expected to reach 3.6 trillion yuan by 2020.

Some, however, still doubt that the e-commerce company will be able to convince regular shop owners to become global traders. Small businesses may not afford the cost of marketing to Chinese consumers, indicated Mark Tanner, founder of Shanghai-based consultancy China Skinny. Also there are fears of worsening trade relations between China and the U.S., with Trump expected impose high tariffs on goods from China

Year to date, BABA stock is up almost 17%, while in the last year, it is up almost 48%.

The post Is Alibaba's 1M Job Promise A Sign Of The Slowing Chinese Economy? appeared first on ValueWalk .

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The post Is Alibaba Group Holding Ltd's Job Promise A Sign Of The Slowing Chinese Economy? (BABA) appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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