China’s Alibaba Group Holding on Thursday reported its slowest-ever increase in quarterly revenue since going public in 2014, as tepid growth in its core e-commerce business and intensifying competition ate into sales.
The slowing Chinese economy has taken a toll on the e-commerce company, as consumers cut back discretionary spending. During its annual Singles’ Day promotional event last November, the company recorded gross merchandise value growth of 8.5%, a record low.
Alibaba is also facing intensifying pressure from rivals like TikTok-owned ByteDance and Kuaishou, who have capitalised on the booming trend of livestreaming e-commerce.
In its fiscal third quarter, Alibaba re-organised its financial reporting of certain business segments to highlight new areas of growth.
International commerce reached 16.45 billion yuan, up 18%. Local consumer services, which includes the company’s food delivery apps, generated 12.14 billion yuan, up 27% from a year ago.
Ant Group, Alibaba’s fintech affiliate, posted a profit of about 17.6 billion yuan for the quarter ended September, according to Alibaba’s filings, compared with 19.7 billion yuan in the previous quarter and 15 billion yuan a year ago.
The group has been subjected to a sweeping restructuring by China, which derailed its $37 billion initial public offering in late 2020.
Alibaba’s shares were down about 3% in New York before the opening bell. They fell about 5% before the results were announced, tracking losses in global shares after Russia launched an all-out invasion of Ukraine.
Net income attributable to shareholders slumped to 20.43 billion yuan in the third quarter from 79.43 billion yuan a year earlier. Revenue rose about 10% to 242.6 billion yuan ($38.37 billion). Analysts on an average had expected revenue of 246.37 billion yuan, according to Refinitiv data.
On an adjusted basis, Alibaba earned 16.87 yuan per American Depositary Share, above expectations of 16.18 yuan.
• Reuters with additional editing by Jim Pollard
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