Alibaba's revenue growth is down, Chinese buyers are cautious

Alibaba, the Chinese online trading giant, saw its growth slow sharply in the third quarter as buyers became more cautious in the world's second-largest economy.

The company said Wednesday that its revenues had increased 41 percent over the same quarter last year, its slowest pace recorded for nearly three years. However, the growth rate was still well above China's 16% rise in November – the lowest since record-breaking in 2015 – and led the company to generate sales of US $ 9 billion. of 117.28 billion Romanian (17.06 billion dollars) in the three months to the end of December.

The company's operating margins also decreased in the quarter, falling 8 percentage points from the same period last year, to 23%. But, according to Bloomberg estimates, net profit rose 37 percent year-on-year to 33.05 billion rubles ($ 4.92 billion), exceeding expectations by the consensus.

The results allowed Alibaba, a company listed on the New York Stock Exchange, to acquire a value of more than 4%, to reach $ 163.22. The company's shares fell by a quarter in the second half of 2018 but have been recovering since the beginning of the year.

The group, whose founder and chairman Jack Ma will retire in September, had already pointed to the impact of slowing economic growth in China, where the company accounts for more than 90% of sales.

In November, it reduced its sales forecast for the full year, ending in March, between 375 and 383 billion BRB, an increase of no more than 53% over the previous year. last year. He previously predicted that revenue growth would reach 60%.

Steven Zhu, an badyst at Pacific Epoch in Shanghai, warned on Wednesday that uncertain prospects were prompting Alibaba and other retailers to be cautious, as buyers could start cutting discretionary spending on items such as clothing. and cosmetics.

Many international companies have reported slowing economic growth in China in recent weeks, including Caterpillar excavator manufacturer and iPhone maker Apple.

But Joe Tsai, vice president of Alibaba, downplayed the impact of the China-China trade war on society.

"Concerns about trade tensions may affect sentiment, but Alibaba's exposure to the tangible effects of commercial tariffs is low."

advisable

In any case, Alibaba and its national counterparts in the technology sector face increasing competition and increasing regulation in their country. E-commerce companies such as Pinduoduo are expanding on Alibaba's territory as regulatory authorities tackle areas such as content censorship – which affects entertainment and live broadcasting activities. Alibaba – and finance.