Cloud computing has become one of Alibaba's fastest-growing initiatives beyond its original e-commerce business.
And here, the Chinese tech giant announced its plan to invest ¥200 billion ($28 billion) on its cloud infrastructure over the next three years, increasing its previous effort to extend its businesses to more countries.
That amount is equivalent to about half of the entire company's revenue generated in fiscal 2019, suggesting that the Alibaba division is certainly spearheading its international expansion.
The division's revenue rose 62% to ¥10.7 billion in the December quarter as Alibaba ate a huge chunk away from Amazon's and Microsoft's market in providing online computing as a service.
With the investment, the e-commerce giant founded by Jack Ma plans to build more data centers to complement its existing network that already covers 21 regions globally, and to also support the development of technologies in areas such as AI accelerator chips and semiconductors, the company said in a statement.
Just like other companies, Alibaba is also struggling with the novel 'COVID-19' coronavirus.
Daily sales for major brands commonly sold via Alibaba, such as Estée Lauder and Uniqlo, reportedly fell between 40% and 80% when compared with January to February 2019. In fact, the pandemic has also disrupted the retail businesses that make up a huge chunk of Alibaba‘s overall revenue, like Tmall and Taobao.
As a whole, the amount of money that flowed through these sources in 2020’s first quarter was expected to shrink after growing annually by more than 30% for years.
On the other hand, Alibaba's cloud division that is one of the company's fastest growing business, is benefiting.
In its previous quarterly earnings report, issued in February, Alibaba reported that its cloud revenue grew 62% to $1.5 billion. Here, Alibaba Cloud is considered the top cloud provider in the Asia Pacific market.
But during the pandemic, more people are working from and are staying at home. For this reason, Alibaba Cloud is reportedly struggling with the traffic associated China’s strict coronavirus lockdown measures imposed back in February.
Alibaba that controls about 50% of the entire Chinese cloud computing market, saw usage surge for its services.
Jeff Zhang, president of Alibaba Cloud Intelligence, said that
"By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process."
While the coronavirus pandemic has disrupted many businesses and economy, it has indeed accelerated many of the digital and technology trends already under way.
From online health and education to remote workplace services, and more.
Previously, Alibaba and other Chinese tech giants like Tencent and Baidu have provided access to on-demand cloud computing and AI services to support government departments, businesses, research institutes and students during the pandemic.
Read: Alibaba, Baidu And Other Chinese Tech Companies Offer Help To Fight The Coronavirus Outbreak
