🧐 ProPicks AI October update is out now! See which stocks made the listPick Stocks with AI

Alibaba misses revenue estimates as e-commerce growth slows, regulatory crackdown persists

Published 08/03/2021, 06:58 AM
Updated 08/03/2021, 11:00 AM
© Reuters. FILE PHOTO: The Alibaba Group logo is seen during the company's 11.11 Singles' Day global shopping festival at its headquarters in Hangzhou, Zhejiang province, China, November 11, 2020. REUTERS/Aly Song
USD/CNY
-
AMZN
-
JD
-
BABA
-
PDD
-

(Reuters) -China's Alibaba (NYSE:BABA) Group Holding Ltd missed analyst estimates for first-quarter revenue on Tuesday, as its e-commerce business was hurt by rising competition from smaller players such as JD (NASDAQ:JD).Com Inc and Pinduoduo (NASDAQ:PDD) Inc.

Alibaba's results mirror those of e-commerce giant Amazon.com Inc (NASDAQ:AMZN) in the United States, as the easing of pandemic-related restrictions has led to more consumers visiting physical stores rather than ordering online.

Core commerce revenue for Alibaba rose about 35% to 180.24 billion yuan in the quarter, compared with estimates of 184.23 billion yuan. In the fourth quarter, the unit's revenue surged more than 70%.

Overall, revenue rose about 34% to 205.74 billion yuan ($31.83 billion) in the first quarter ended June 30, below estimates for 209.39 billion yuan, according to IBES data from Refinitiv.

Net income attributable to shareholders fell to 45.14 billion yuan, compared with 47.59 billion yuan a year earlier.

On an adjusted basis, the company earned 16.60 yuan per share, above estimates for 14.43 yuan.

Ant Group, the fintech affiliate of Alibaba Group, recorded a profit of about 13.48 billion yuan in the quarter ended March, according to the Chinese e-commerce giant's filing.

Alibaba, which holds about a third of Ant, posted a profit of 4.49 billion yuan for the quarter ended June 30 from its investments in the financial conglomerate.

Revenue in Alibaba's cloud computing division grew 29% year-on-year, reaching 16.05 billion yuan ($2.49 billion)

The results come amid an ongoing Chinese regulatory crackdown on industry, during which Alibaba has become one of the main targets.

Late last year, regulators halted a planned $37 billion IPO of Ant Group in Shanghai and subsequently called for a restructuring of the financial unit.

In April, China's anti-monopoly regulator fined Alibaba $2.75 billion for engaging in anti-competitive practices.

During an earnings call with investors, Alibaba CEO Daniel Zhang said the company would continue to monitor the impact of ongoing regulatory changes on the company's business.

He cited a recent regulatory crackdown on community marketplace platforms letting sellers offer items below market price as one example of a sector the company is monitoring, in addition to the Data Security Law and an investigation from the Ministry of Industry and Information Technology into open links between rival platforms.

© Reuters. FILE PHOTO: The Alibaba Group logo is seen during the company's 11.11 Singles' Day global shopping festival at its headquarters in Hangzhou, Zhejiang province, China, November 11, 2020. REUTERS/Aly Song

"We are in the process of studying the regulatory requirements, evaluating the potential impacts on our relevant businesses and we will respond positively with actions," Zhang said.

($1 = 6.4628 Chinese yuan renminbi)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.