Alibaba Experience Slowdown On Revenue Growth

China slowdown weighs on revenue growth at internet giant Alibaba

China slowdown weighs on revenue growth at internet giant Alibaba

Alibaba, the second most valuable public company in Asia after Tencent, posted on Thursday third-quarter revenue of 117.28 billion yuan (13.33 billion pounds), compared with 83 billion yuan a year earlier.

Alibaba derives more than 90% of its sales from China and any signs of a worsening Chinese economy is very likely to impact the Chinese-dependent company.

Anticipating the headwind, Alibaba previously lowered its revenue outlook for its financial year ending March even before the top sales season. Despite its record-breaking sales, Alibaba Singles Day's gross merchandise volume annual growth rate dropped from 39% to 27%, the smallest rate increase in the event's 10-year history, signaling a weaker macro environment in China. Core Commerce revenue increased by 40% year-over-year to United States dollars 14.95 Billion, while Cloud Computing revenue rose by 84% to USD 962 Million.

However, last week, Tsai noted that sales had ticked up in December, though demand for big-ticket items continued to slow.

On a call with investors and analysts, Alibaba CEO Daniel Zhang acknowledged the external pressures of the economic climate. Alibaba's shares rallied as much as 3% during pre-market trading on Wednesday.

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

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

China's economic growth in 2018 slowed to its weakest in almost three decades, amid faltering domestic demand and bruising USA tariffs.

Internet giant Alibaba saw its revenue growth slow in the final three months of past year, in quarterly results likely to stir up concerns over the weaker China market, recently signalled to by USA tech giants.

The company's core commerce increased 40% year-over-year and its cloud computing increased a whopping 84% YoY. Revenue from digital media and entertainment increased 20 percent year-on-year to 6,491 million yuan ($944 million), while revenue from innovation initiatives and others increased 73 percent year-on-year to 1,333 million yuan ($193 million).

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