Growth at Alibaba failed to meet analysts’ expectations during the latest quarter because of rising competition from smaller rivals.
The world’s second largest ecommerce group behind Amazon generated commerce revenue of 180.24 billion yuan (£20 billion) in the three months to June 30, up by more than a third on the previous year but shy of forecasts of 184 billion yuan. However, it said that “multiple engines” continued to drive its expansion after recording a significant rise in cloud computing and digital media sales.
Shares in Alibaba slipped by 1.3 per cent, or $2.71, to close at $197.38 in New York.
The $540 billion business, which was listed on Wall Street in 2014, is Asia’s most valuable public company. Most of its revenue comes from the fees it charges for trading goods and services on its online marketplaces, such as Tmall and Taobao, which are the most popular in China.
Its annual active user base in China swelled to 828 million in the year to June 30, up from 732 million 12 months previously. Worldwide, it had 1.18 billion users over the period.
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Its total revenue also missed projections, rising by 34 per cent to 205.74 billion yuan. Net income attributable to shareholders dropped 5 per cent to 45.14 billion yuan.
Consumers around the world, having relied heavily on ecommerce groups in the early months of the pandemic, are going back into physical shops. Amazon spooked Wall Street last week when its growth also fell short of expectations. Competitors such as JD.Com and Pinduoduo have also been challenging Alibaba’s dominance.
Daniel Zhang, 49, Alibaba’s chairman and chief executive, said: “We believe in the growth of the Chinese economy and long-term value creation of Alibaba and will continue to strengthen our technology advantage in improving the consumer experience.”
The results came in the midst of a regulatory crackdown in China, of which Alibaba has found itself one of the primary targets.
It was hit with a record $2.8 billion fine by Beijing this year after an antitrust investigation.
