China slowdown weighs on revenue growth at internet giant Alibaba

China slowdown weighs on revenue growth at internet giant Alibaba

China slowdown weighs on revenue growth at internet giant Alibaba

The headquarters of private e-commerce giant Alibaba Group in Hangzhou, capital of Zhejiang province.

Chinese e-commerce company Alibaba on January 30 reported revenue of 117 billion yuan ($17.4 billion) for the three months to December, an increase of 41 percent from the same quarter a year ago. Analysts polled by FactSet expected the company to post 119.03 billion yuan.

"The slowdown of macro might cause concerns in the market; however, what we see from Alibaba's platforms is Chinese consumption growth is still strong", he said. -China trade war and more cautious spending overall.

The company said sales from core commerce increased 40% year-over-year to 102.8 billion Chinese yuan ($14.96 billion) and its cloud-computing revenue surged 84% YoY to 6.6 billion Chinese yuan ($962 million).

Recent earnings reports of other companies, including Apple, reflect signs of weak sales in the Chinese market.

Profitability got a one-time boost from a non-cash gain of 22 billion yuan from the revaluation of Alibaba's previously held equity interest in food and lifestyle services firm Koubei, partly offset by impairment charges of 7.06 billion yuan.

Alibaba's shares, traded on the New York Stock Exchange, closed up more than 6 per cent on Wednesday.

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Alibaba did not issue any guidance for the fiscal fourth quarter.

Alibaba's earnings announcement made no mention of the country's economic slowdown, as Chief Executive Officer Daniel Zhang focused on the growing contribution of forward-looking segments like cloud computing and data. The company said it has since repurchased 10.86 million of its ADSs for $1.6 billion.

Alibaba said that was primarily driven by increased spending from enterprise customers.

Alibaba lowered its revenue outlook for its financial quarter ending in March before the top sales season due to economic uncertainties, according to Reuters.

Last year, the economic growth of China slowed to its weakest in almost 30 years, with the growth expected to decline even further in 2019.

Alibaba's e-commerce business drives the company, but the company has built a cloud business that rhymes with what Amazon has done with Amazon Web Services.

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