Alibaba’s quarterly revenue rose 2% from a year earlier to the equivalent of $35.9 billion, slower than the 3% expansion in the previous quarter, the company said Thursday.
Net income attributable to ordinary shareholders was the equivalent of $6.8 billion, up 69% from the same period a year before. Alibaba’s net profit was dented a year before partly due to an impairment of goodwill related to its digital media and entertainment segment.
While the revenue results were largely in line with forecasts, Alibaba’s shares were up around 3.9% in morning trading.
“We delivered a solid quarter despite softer demand, supply chain and logistics disruptions due to impact of changes in Covid-19 measures,” Alibaba Chief Executive
Late last year, widespread lockdowns and other pandemic control measures had dampened consumer spending. Beijing scrapped its zero-Covid policy in December. Around that time, infections surged nationwide and impacted businesses.
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In December, retail sales—a proxy for domestic consumption—fell 1.8% from a year earlier, according to the National Bureau of Statistics. Still, online sales were solid. China’s e-commerce sales of physical goods expanded 12.9% year-over-year in the fourth quarter, according to government data.
After China’s economy grew 3% in 2022, economists expect a consumer-led recovery this year. But spending could be slow to rebound, some economists say.
Mr. Zhang said he expects consumer sentiment and economic activity to recover.
Recently, Alibaba and its affiliate Ant Group Co. saw regulatory pressures that they had faced for two years somewhat ease. In January, Alibaba co-founder
ceded control of Ant, and China’s central bank said the business rectification of Ant had been completed, concluding a tumultuous period for the fintech giant.
Still, China is keeping a tight leash on tech companies. Recently, Chinese authorities acquired a stake in a subsidiary of Alibaba. The municipal government of Hangzhou, where Alibaba is based, also signed a strategic cooperation agreement with the company.
Weighing on Alibaba is competition in its main domestic e-commerce business. Rivals
PDD Holdings Inc.’s
Pinduoduo have continued biting into Alibaba’s market share. Short-video platforms including ByteDance Ltd.’s Douyin and
too, increasingly pose a challenge.
Abroad, its unit Lazada is competing with
’s Shopee in South East Asia. Its international shopping site AliExpress faces competition from fast-fashion giant Shein and PDD’s six-month-old American subsidiary Temu.
Alibaba’s quarterly revenue in its reporting currency was at 247.8 billion yuan and its net income attributable to ordinary shareholders was 46.8 billion yuan, based on an exchange rate of about 6.9 yuan to a dollar that Alibaba used.
Ant Group recorded an estimated net profit of 3.05 billion yuan in the quarter ended Sept. 30, sliding 83% from the same period a year before, according to The Wall Street Journal’s calculations based on Alibaba’s earnings. That is a faster decline than the 63% year-over-year decline in the quarter ended June 30. Alibaba owns a third of Ant and reports its share of profits one quarter in arrears.
The drop in Ant’s profit was mainly due to a decrease in the valuation of certain overseas equity investments, which resulted from changes in capital markets conditions, according to Alibaba’s disclosure.
—Rebecca Feng contributed to this article.
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