Home Alibaba records the highest Brand value loss in 2022
Finance News

Alibaba records the highest Brand value loss in 2022

Fact Checked
Fact Checked
Everything you read on our site is provided by expert writers who have many years of experience in the financial markets and have written for other top financial publications. Every piece of information here is fact-checked. We sometimes use affiliate links in our content, when clicking on those we might receive a commission - at no extra cost to you. By using this website you agree to our terms and conditions and privacy policy.
Disclosure
Disclosure
We do our best to help you make intelligent financial decisions. Tradingplatforms.com is compensated if you access certain products or services offered by eToro USA LLC and/or eToro USA Securities Inc. and other brokerage companies. Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success. This however does not affect our assessments of the brokers, their features, and their overall rating.

Alibaba has recorded the highest brand value loss in the first quarter of 2022. The brand value of the famous online trading platform has plummeted by 42%, according to data from tradingplatform.com

Edith Reads from tradingplatform.com attributes the drop to a return of normalcy as the world is facing out Covid-19. She said,

“As coronavirus was taking over the globe, many people turned to online shopping. It was the safest way to get their products as physical contact was restricted. Investors couldn’t fly across the continents to make purchases, and trading platforms were making huge profits. However, that is not the case since 2022 began. There is a return to normalcy, and international flights have resumed. Most clients are opting for physical shopping, which explains the huge loss Alibaba is recording.”

Strict lockdowns in China

Alibaba Group Holding, China’s most prominent tech business, has been down for days on worries that the country’s stringent lockdowns will harm its economic growth. The Chinese government has adopted a stringent zero-COVID policy across the country following a new wave of infections. 

The IT stock has dropped, and there is no indication that this trend will reverse. This is making investors more negative about Chinese equities.

China’s COVID restrictions are far from complete, and some analysts fear that they will eventually extend to Beijing. Retail sales and industrial production have already slowed due to the lockdowns. 

According to The Wall Street Journal, retail sales fell 3.5 percent year over year in March, while industrial production increased only 5%, compared to projected 7.5 percent. With no end in sight to the zero-COVID policy, Alibaba investors and Chinese stock investors, in general, could expect additional share price declines shortly.

Chinese officials penalized Alibaba after an anti-monopoly investigation by imposing a $2.8 billion fine. The fine was massive and left a significant dent in the online trading platform. The penalty came when Alibaba was rallying to break out of the downtrend. 

Moreover, authorities halted the $34.5 billion Ant Group IPO. Alibaba’s fintech unit was planning to list in Shanghai and Hong Kong. The Shanghai exchange suspended the IPO listing due to the company’s failure to meet its regulatory standards. According to an analyst from Tradingplatforms.com, all these events have made Alibaba vulnerable.

The major brands’ trend

There is a mixed-signal on notable brands’ performance in 2022. Tech conglomerates and other businesses harnessed technical innovation to dominate the 2022 brand ranking. This is unsurprising given that the epidemic brought many elements of life into the digital realm, accelerating the demand for digital solutions.

 Tesla surpassed Apple as the quickest growing brand globally, with a rate of over 157 % in 2021. On the other hand, brands in hard-hit industries reported some of the highest brand value losses in recent history. Warner bros experienced a value loss of 33% second to Alibaba. The Warner Bros loss might be attributed to its recent merger.

 

Question & Answers (0)

Have a question? Our panel of experts will answer your queries. Post my Question

Leave a Comment

Write a Review

Your email address will not be published. Required fields are marked *

Edith Muthoni Freelance Writer

Edith Muthoni Freelance Writer

Edith is a dynamic and seasoned finance writer with a focus on crypto and trading - featured on different platforms, including Cryptopolitan.com, Insidebitcoins.com, and Learnbonds.com. With a Bachelor's Degree in Actuarial Science from Strathmore School of Business, Edith combines her education and experience to analyze complex market trends. This solid foundation also enables her to simplify complex trading strategies, delivering informative content, relevant to our fast-paced economy.

Edith's passion for finance and cryptocurrency keeps her at the forefront of industry news. She creates content that empowers her readers. She’s also a personal finance coach, providing expert advice on trading and other intricate finance issues