Alibaba reports slowest revenue growth since going public as competitive base

On Thursday, Chinese e-commerce giant Alibaba reported its slowest quarterly revenue growth since going public in 2014, as sales at its core business fell and competition is increasingly fierce. China’s slowing economy is also hurting the company as consumers cut back on discretionary spending.

Alibaba said the group’s revenue jumped about 10% in October-December 2021 to 242.6 billion yuan (about Rs 289,348), marking the first time quarterly sales growth has fallen below 20% . According to Refinitiv data, analysts have expected revenue of 246.37 billion yuan (about Rs. 29,425,447 crore).

Customer management revenue, a key metric that tracks how much money sellers spend on advertising and promotions on Alibaba’s websites, fell 1% year-on-year. That marks the first time that revenue for the segment, which accounts for 41 percent of Alibaba’s total, has declined since the company’s IPO.

Speaking on an investor call, deputy chief financial officer Toby Xu said the drop was partly due to a drop in merchant fees amid a slowing economy.

During China’s annual Singles’ Day sale last November, the company recorded a growth in total merchandise value of 8.5%, a record low.

© Thomson Reuters 2022