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SHANGHAI – The slowdown in the economy is weighing heavily on China's largest e-commerce company.
Alibaba Group announced Friday a turnover of $ 12.4 billion for the last quarter, an increase of 54% over the previous year, but less than analysts' estimates. The company also indicated that it was lowering its estimate of revenue growth for the full year, ending in March, in light of current macroeconomic uncertainties.
Alibaba has weathered the signs of slower growth in China, the world's second-largest economy after the United States. But his new estimate suggests that China's slowdown has been felt in more and more sectors of the economy, including among the growing middle class.
Online titan is expanding its consumer empire to the offline world, and its rapidly expanding supermarket chain and food delivery services have contributed significantly to recent revenue growth. However, spending on the development of these new businesses weighed on the company's bottom line. Alibaba's profits for the three months ended September increased by 13% over the previous year.
Alibaba has long enjoyed an unparalleled hold on how Chinese consumers buy their phones and computers. But society believes that its future depends on an increased presence in the larger, non-virtual world.
The company now operates nearly 80 of its Sumptuous full-service Hema supermarkets, compared with 20 a year ago. Cainiao, Alibaba's logistic branch, has recently opened what is called "China's largest Intelligent Robotic Warehouse," in which 700 boxy droids are trying to rearrange giant shelves loaded with merchandise.
An area of expansion outside of e-commerce has paid off for Alibaba. The company's cloud computing business, which is the market leader in China, grew by 90 percent in the last quarter of the previous year.
But overall, Alibaba faces tough economic conditions.
The quarter that ended in September was the first since the start of the trade war between the Trump government and China. Alibaba executives sought to reassure investors by pointing out that, even if tariffs weighed heavily on US products, Chinese customers could still use Alibaba's platforms to buy more products made at home or in other countries. country.
But society's biggest concern, in the face of the collapse of the Chinese stock market and the fall of its currency, is that middle-class buyers seem to be tightening their purse chains. Alibaba shares have lost about 30% of their value since June, as fear of the Chinese economy is compounded by fears of a frostier regulatory environment for private companies.
Shawn Yang, 27, works in finance in Shanghai. He said that this difficult period in his industry has led him to rethink non-essential purchases such as video games and gadgets.
This year? He plans to spend less than half of that amount – in Zara's jeans, two work shirts and a bottle of moisturizer.
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