Last quarter, the revenue of Alibaba, the Chinese e-commerce giant, grew at its slowest pace in a period of three years. It comes amidst the ongoing trade dispute between the United States of America and China and a general slowdown in the region that is weighed heavily on its busiest period.
The second most valuable public firm of Asia published revenue amounting to 117.28bn yuan (£13.4 billion) for the three months to the 31st of December, compared to 83 billion yuan that was recorded a year earlier. This slightly missed the consensus estimates of 118.9 billion yuan, as compiled by Refinitiv. It also came after Alibaba had already trimmed down its sales outlook by six percent last November.
However, the net income of Alibaba increased by 33 percent to reach 30.9 billion yuan, exceeding the estimates of 22.1 billion yuan and sending its share price up by two percent in pre-market trade.
Usually, the third quarter plays host to the biggest revenue haul of the company for the year, as it contains Singles’ Day, the biggest online sales event of the world. Even though the e-commerce company scored a record intake of $30 billion (£22.9 billion) on last year’s Singles’ Day, the annual growth of the event dropped to the weakest rate in its decade-long history.
Daniel Zhang the chief executive of the Alibaba group, said that the company had “another strong quarter,” with growth driven by its cloud and data technology segments.
The revenue for its cloud business increased by 84 percent year-on-year to 6.6 billion yuan, while its entertainment and media business increased by 20 percent to 6.5 billion yuan.
The chief financial officer of Alibaba, Maggie Wu, stated: “In the December quarter, we delivered strong top-line growth of 41 per cent year-over-year.” She said that the profitability of this quarter would be re-invested into establishing “other important strategic businesses and technology”.
Last year, the economic growth of China slowed to its weakest in nearly 30 years, with the growth expected to decline even further in 2019.