While Alibaba reports strong economic growth, US-retailer Walmart posted a 23% drop in net income, mainly due to heavy investment in ecommerce. Walmarts US stores saw a 1.8% rise in sales compared with the second quarter of 2017, but net income fell by 23.2%.
Alibaba’s investors share the company’s optimism and shares rose by 5% following the results, bringing the stock price up 81% in 2017.
According to analysts cited by BBC, the China-based company still has room for expansion, as ecommerce only accounts for about 15% of the total retail market in China.
The two companies have different strategies, mainly dictated by competitor proximity. While Walmart competes with rival Amazon on US soil, Alibaba can rest more easily, as the China-based company said that it is not relying on the US market for growth. Instead, Alibaba focuses on Indonesia, having recently invested USD 1.1 billion in Tokopedia.
On the other hand, Walmart, which has a significant bricks-and-mortar presence, has also formed an alliance with Alibabas local rival JD.com buffing up its competitiveness against ecommerce retailer and rival Amazon.
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