Hi all, this is Zheping in Hong Kong. China's tech giants are facing up to a new reality. But first...Todayâs top tech news: Meta Platforms
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Hi all, this is Zheping in Hong Kong. China's tech giants are facing up to a new reality. But first... Todayâs top tech news: - Meta Platforms Inc. found and [disabled](bbg://news/stories/R7ZX7XDWLU6G)a disinformation network that operated accounts and pages targeting Ukraine
- Activist hackers in Belarus allegedly [targetedÂ](trains to disrupt the movement of Russian soldiers into Ukraine China Techâs new normal Alibabaâs latest results gave us clues on how Chinaâs largest tech corporations are coping, a year into Beijingâs bruising internet crackdown. On Thursday, Chinaâs largest e-commerce company reported 10% topline growth for the December quarter, the [slowest pace since its 2014 listing](. Its bread-and-butter customer management revenue â where it charges merchants marketing and other service fees â contracted for the first time on record, while a 20% expansion in the cloud business â billed as a new growth engine â missed expectations. After unfurling the numbers, Chief Executive Officer Daniel Zhang admitted what many industry watchers had suspected anyway: that the aggressive land-grab commonplace across Chinaâs internet arena was a thing of the past. âWe have substantively captured all consumers with purchasing power in China,â Zhang told analysts on a call. âOur focus will shift from new user acquisition to user retention and ARPU growth.â By ARPU, he meant average revenue per user. Instead of growing the pie, Alibaba will try and milk more out of its existing one billion users. While this doesnât come as a huge surprise given the companyâs sheer size, Zhangâs comment perfectly sums up a new normal of low growth for Chinaâs internet giants. There was a time when entrepreneurs like Meituanâs Wang Xing loved to talk about âboundless expansion,â meaning reinvesting most, if not all, profit into new businesses, and channeling existing users from one platform to another to build up an internet ecosystem of their own. But a weak economy, coupled with the governmentâs hostility toward private firms it deems too powerful, have made those companies realize that they are getting closer to the boundary. Itâs not just Alibaba. Arch-nemesis Tencent Holdings Ltd. is expected to deliver its slowest revenue growth on record a couple of weeks from now, thanks to a seven-month freeze on new game approvals. So is TikTokâs domestic rival Kuaishou Technology, battered by tepid ad and e-commerce spending. And then thereâre signs of a pullback that have yet to show up in financial models: Tencent recently shut an online marketplace for shopping bargins, TikTok-owner ByteDance Ltd. sold its stock-trading app, and firms like Didi Global Inc., Baidu Inc. and Weibo Inc. are reducing headcount across teams. All this is about focusing on their core businesses. Given the difficulties at home, Chinese internet firms are turning increasingly outward. Both Alibaba and Tencent have started to outline international versus domestic growth, so investors have a clearer picture of the divergence. TikTok is now shouldering a bigger role in ByteDanceâs commercial strategy, as the hit video hub unleashes more ads beyond just sponsored hashtag challenges. Thatâs because many fear Chinaâs tech crackdown is far from over. On Feb. 18, the countryâs top economic planner [demanded Meituan and its food delivery peers]( lower fees they charge restaurants in Covid-hit regions. The next trading day, [Bloomberg reported]( that Beijing had ordered state firms to report their exposure to Jack Maâs Ant Group Co. -- the first target of the sweeping crackdown that subsequently engulfed most, if not all, of Chinaâs major internet firms. Elsewhere, investors spooked by [rumors]( of an impending gaming crackdown contributed to a $100 billion selloff in shares of Chinaâs Big Three. What's clear from Zhangâs comments is that the go-go days of free-wheeling domestic expansion are over. Now, given the new realities in China, Alibaba and its rivals will have to show they're up to the challenge of building a thriving global business.
If you read one thing YouTubeâs pulling the plug on advertisements from Russian state-backed media and certain other accounts included in American [sanctions](bbg://news/stories/R7Z332DWX2PT). What else you need to know Follow the Ukraine situation here. Officials from Kyiv will [meet](Russian counterparts at the Belarus border, hours after President Vladimir Putin put his countryâs nuclear forces on higher alert. A key court trial begins. Jinhua, a Chinese chipmaker [blacklisted](bbg://securities/NSN%20R7VR9WT1UM0X)by Washington as a technology thief more than three years ago, is finally getting a chance to prove it was wrongly accused. Follow Us More from Bloomberg Dig gadgets or video games? [Sign up for Power On]( to get Apple scoops, consumer tech news and more in your inbox on Sundays. [Sign up for Game On]( to go deep inside the video game business, delivered on Fridays. Why not try both? Like Fully Charged? | [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
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