Now Reading
Alibaba Misses Revenue Estimates Amidst Slowing eCommerce Growth, Regulatory Crackdown

Alibaba Misses Revenue Estimates Amidst Slowing eCommerce Growth, Regulatory Crackdown

Alibaba Misses Revenue Estimates Amidst Slowing eCommerce Growth, Regulatory Crackdown

Chinese eCommerce giant Alibaba missed Q1 revenue estimates with smaller players such as JD.Com Inc and Pinduoduo eating into its market share.

The company’s core revenue increased by 35 percent reaching $27.88 billion, less than the $28.5 billion analysts had expected. In comparison, the company saw a 70 percent surge in revenue in Q4.

Revenue from the company’s cloud computing division grew by 29 percent year on year, reaching $2.49 billion. Overall, revenue jumped by 34 percent to $31.83 billion, below the $32.4 billion estimate.

The company also saw growth in its financial services division. Ant Group, a third of which is owned by Alibaba, reported a profit of $2 billion.

Alibaba’s less than optimal results come at a time the company is facing increased scrutiny from the Chinese government ever since the company’s founder Jack Ma criticized the financial regulatory environment in the country at a conference in October last year.

Late last year, Chinese regulators put the kibosh on the eCommerce giant’s planned $37 billion IPO, demanding that the company restructure its financial arm. Fast forward to April this year; the company was fined $2.75 billion for engaging in anti-competitive practices.

Alibaba is taking notice and is looking to carefully tread the ongoing regulatory scrutiny surrounding marketplace platforms that let businesses offer items below-market prices, in addition to data security laws and open links between competing platforms, Reuters reported.

 “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,” Alibaba CEO Daniel Zhang said.

Scroll To Top