Chinese shoppers conjure up strong sales at Alibaba

Feb 01, 2019, 01:55
Chinese shoppers conjure up strong sales at Alibaba

The Chinese e-commerce giant said its cloud computing business saw revenue jump 84 percent in the fourth quarter to $962 million.

Chinese e-commerce group Alibaba reported a slowdown in revenue growth and lower margins in the December quarter, suggesting it is also feeling the effects of the slowdown in the Chinese economy. Bloomberg analysts expected revenue of Dollars 17.77 Billion and earnings of USD 1.68 per share.

According to Alibaba's quarterly sales results, the Chinese business has outperformed its global technology peers thanks to its significant growth in active users.

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That data also showed that full-year retail sales growth slowed slightly to 9.0 percent.

For the third quarter, Alibaba reported revenue of Dollars 17.05 Billion, increasing 41% year-over-year, while earnings was USD 1.77 per share.

Tech investors have fretted over the impact of a slowing Chinese economy and a crippling Sino-U.S. trade war, which have been blamed for weak results at a slew companies including Apple Inc and chipmakers. Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of almost 700 million consumers across retail, digital entertainment and local consumer services.

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Besides expanding its cloud services, Alibaba is tapping overseas markets and pouring money into what it calls "new retail", which optimises in-store sales and service using data culled online. 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.

China's economy posted a 6.6% expansion in 2018, the slowest in 28 years, as factory activity and domestic demand tapered.

On Tuesday, China's Ministry of Industry and Information Technology said revenue growth rates for domestic technology companies did not rise in 2018, and that consumer spending had slowed amid increased economic pressure.

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In other words, Alibaba has a lot of irons in a fire that is still burning brightly, despite recent headlines.