Alibaba on Thursday reported a 1.7% rise in third–quarter revenue that missed analysts’ estimates, as heavy spending on one-hour delivery and promotions during the peak shopping season did not translate into a surge in demand.
Alibaba‘s U.S.-listed shares fell nearly 4% in premarket trading.
China’s largest e-commerce company booked revenue of 284.84 billion yuan ($41.28 billion) for the three months through December, compared with estimates of a 3.7% rise, or 290.7 billion yuan, according to an average of 21 analyst estimates compiled by LSEG.
Its net income fell 66.3% to 15.63 billion yuan.
A prolonged property crisis, coupled with concerns about income stability, continued to weigh on consumer sentiment, limiting spending even during traditional high seasons for spending.
Singles’ Day sales extended to over a month of promotions but saw muted enthusiasm. Retailers ramped up discounts and subsidies to encourage spending, but cautious consumers and year-round deals diluted the event’s traditional sales surge.
Retailers, including Alibaba and JD.com, intensified competition during the quarter, spending heavily on discounts and faster delivery to capture market share from food-delivery leader Meituan, pressuring profit margins.
In the budget segment, Alibaba continued to face stiff competition from PDD Holdings’ Pinduoduo and ByteDance-owned Douyin, which often offer deep discounts and year-round promotions to attract price-sensitive consumers.
Reuters
