Alibaba Group Holding's revenues for its third fiscal quarter, ended on Dec. 31, grew at their weakest pace in four years, weighed by a slowing Chinese economy, which is being attributed to the ongoing trade war with the U.S.
The Chinese e-tailer's sales increased by 41 percent from the year-ago quarter to 117,280 million yuan renmimbi (€15.3bn-$17.5bn), falling below the analysts' consensus of RMB 118,900 million.
In November, the company's “Singles' Day” – the world's biggest online sales event – generated $30 billion. However, the growth from the corresponding November 2017 event dropped to the weakest rate since the event started 10 years ago. This led the tech giant to lower its revenue guidance by 4 to 6 percent for the current financial year.
On the other hand, the company's net income jumped by 33 percent to RMB 30,960 million (€4bn-$4.6bn), topping analyst's expectations.
Revenues from the core e-commerce business rose by 40 percent to RMB 102,800 million (€13.4bn-$15.3bn). Sales from the China commerce wholesale business rose at the same pace, jumping by 40 percent to RMB 2,694 million (€351.3m-$392.0m).
Alibaba's revenues from the international commerce retail business advanced by 23 percent to RMB 5,834 million (€760.8m-$849.0m), primarily due to the consolidation of Trendyol, Turkey's leading e-commerce platform. Meanwhile, sales from the international commerce wholesale business rose by 31 percent to RMB 2,175 million (€283.6m-$316.2m), led by increases in the average revenues from paying members on Alibaba.com, the company's global wholesale marketplace.
Alibaba has been trying to grow outside of its core e-commerce business to win new customers. The company continued to invest heavily in cloud computing, artificial intelligence and online entertainment. Revenues from its cloud business soared by 84 percent to RMB 6,600 million (€860.7m-$985.0m), while sales from its digital entertainment and media business improved by 20 percent to 6,500 million (€847.5m-$970.0m).
Overall, the group's adjusted Ebitda rose by 13 percent to RMB 40,708 million (€531.6m-$608.5m).
In September, Alibaba acquired a 48 percent stake in a joint venture in Russia with Mail.ru, a company that controls some popular Russian social networks, and a Russian telecom company, Mega Fon. The project, which is backed by the Russian Direct Investment Fund (RDIF) with a 13 percent stake, is in line with Alibaba's plan to build up a “digital silk road” across Eurasia.
The new joint venture combines e-commerce with social media and online gaming. Alibaba already has a presence in Russia through Aliexpress, an international e-commerce operation that sells products from China in other countries.
