Chinese e-commerce giant Alibaba reported on Thursday its slowest quarterly revenue growth since going public in 2014, hit by a drop in sales at its core business segment and intensifying competition. The slowing Chinese economy has also taken a toll on the company as consumers cut back discretionary spending.
Alibaba said group revenue rose about 10 percent in October-December 2021 to 242.6 billion yuan (roughly Rs. 289,348 crore), marking the first time quarterly sales growth has fallen below 20 percent. Analysts on average had expected revenue of 246.37 billion yuan (roughly Rs. 29,425,447 crore), according to Refinitiv data.
Customer management revenue, a key metric which tracks how much money merchants spend on ads and promotions on Alibaba’s sites, fell 1 percent year-on-year. That marks the first time revenue for the segment, which made up 41 percent of Alibaba’s total revenue, has decreased since the company’s IPO.
Speaking on an investor call, deputy chief financial officer, Toby Xu said the drop was caused in part by lowering merchant fees amid the slowing economy.
During China’s annual Singles’ Day promotional event last November, the company recorded gross merchandise value growth of 8.5 percent, a record low.
© Thomson Reuters 2022