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(Reuters) – Chinese e-commerce giant Alibaba (NYSE:BABA) Group Holding Ltd reported on Thursday its slowest quarterly revenue growth since going public in 2014, as tepid gains in its core business and intensifying competition ate into sales.
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% in October-December 2021 to 242.6 billion yuan ($38.37 billion), marking the first time quarterly sales growth has fallen below 20%.
Analysts on average had expected revenue of 246.37 billion yuan, 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% year-on-year.
That marks the first time revenue for the segment, which made up 41% of Alibaba’s total revenue, has decreased since the company’s IPO.
During China’s annual Singles’ Day promotional event last November, the company recorded gross merchandise value growth of 8.5%, a record low.
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.
Alibaba is also facing intensifying pressure from rivals like ByteDance-owned Douyin and Kuaishou, which have capitalized on the booming trend of livestreaming e-commerce.
In its fiscal third quarter, Alibaba re-organized 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, reported a profit of about 17.6 billion yuan for the quarter ended September, according to Alibaba’s filings on Thursday, compared with 15 billion yuan a year ago.
Alibaba reports its profit from Ant one quarter in arrears.
Ant has been subjected to a sweeping restructuring by China, which derailed its $37 billion initial public offering in late 2020.
In the October-December quarter, Alibaba repurchased approximately 10 million of American Depositary Shares (ADSs) worth approximately US$1.4 billion.
For the nine months ending in December, the company purchased roughly $7.7 billion worth of shares, as part of a US$15 billion share repurchase programme.
Net income attributable to shareholders slumped to 20.43 billion yuan in the third quarter from 79.43 billion yuan a year earlier.
On an adjusted basis, Alibaba earned 16.87 yuan per ADS, above expectations of 16.18 yuan.
Once Asia’s biggest listed company, Alibaba has long given up its crown to Taiwanese chipmaker TSMC, and even fallen behind local rivals Tencent and Kweichow Moutai.
The company’s U.S.-listed shares have lost roughly half their value in the past 12 months amid Beijing’s regulatory crackdown on certain industries.
($1 = 6.3226 Chinese yuan renminbi)
