Regarding concerns about capital expenditures leading to profit declines raised in Alibaba's earnings call.
At this stage, on one hand, during economic downturns, running a business is similar to investing; investing during downturns prepares for the subsequent economic recovery. If there is no investment at this stage, Alibaba will be left out when the economy warms up.
On the other hand, cross-border e-commerce and cloud intelligence businesses are both in a period of rapid growth. There is fierce competition among the giants in cross-border e-commerce, and this is the stage where capital investment is needed to capture market share. AI is even more so, with its vast potential being a must-contest area for all major players. AI technology has already proven its commercial viability and requires increased capital investment to seize the initiative.
For example, if Tencent had not heavily invested in the development and operation of WeChat in 2010, it would not have been able to secure its position in the mobile internet era.
Are we heading for an Amazon-Alibaba e-commerce showdown? - MarketWatch
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