Alibaba’s revenue growth slows as crackdown continues

LONDON — China’s leader in e-commerce Alibaba Group Holding Ltd. Tuesday reported mixed results for the quarter ended June 30, as the company has been the main target of China’s ongoing crackdown on technology regulators.

Revenue for the period increased 34 percent year-over-year to 205.74 billion renminbi, or $31.83 billion, below estimates of 209.39 billion renminbi, according to data from Refinitiv. In comparison, sales increased 64 percent year-on-year iin the March quarter.

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Core trading revenue for Alibaba rose about 35 percent to 180.24 billion renminbi in the quarter, compared to estimates of 184.23 billion renminbi.

Net income in the period was 45.1 billion renminbi, or $6.99 billion, down from 47.6 billion renminbi a year earlier. Operating income fell 11 percent to 30.84 billion renminbi, or $4.77 billion, year on year.

Adjusted earnings before interest, taxes, depreciation and amortization came in at renminbi 48.6 billion, or $7.53 billion, down 5 percent year on year, but higher than the renminbi 46.7 billion expected by Wall Street.

Alibaba said the declines were mainly due to its investments in strategic areas “to capture incremental opportunities” such as community marketplaces and Lazada, which posted more than 90 percent year-over-year order growth over the period, as well as higher spending on growth initiatives within Chinese retail marketplaces, such as Taobao Live and the second-hand trading platform Idle Fish.

During the period, global annual active consumers across the Alibaba ecosystem reached 1.18 billion, up 45 million from the March quarter, which includes 912 million consumers in China.

Although growth has slowed, Daniel Zhang, chairman and chief executive officer of Alibaba Group, said the company still believes “in the growth of China’s economy and long-term value creation of Alibaba, and we will continue to leverage our technology advantage in improving the consumer experience and helping our enterprise customers achieve successful digital transformations.”

In an effort to reassure investors, the group’s chief financial officer Maggie Wu added that the company will increase its share buyback program from $10 billion to $15 billion as Alibaba is “confident in our long-term growth prospects.” “.

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