Alibaba is getting crushed after revenues miss

Second-quarter revenue rose 28 percent to $3.26 billion, which not only fell below the $3.39 billion analysts polled by Thomson Reuters had forecast, but also represented its slowest quarterly revenue growth in three years. Investor confidence has been shaken, with the company’s market value plunging to US$100 billion.

Q1 gross merchandise volume increased 34% to 673 billion, below analysts’ expected growth of 38% growth.

“Over the past two decades, e-commerce has become an inextricable part of the lives of Chinese consumers, and this new alliance brings forth a new commerce model that fully integrates online and offline”, Jack Massachusetts, CEO of Alibaba said in a press statement.

Massachusetts is trying to diversify Alibaba’s businesses while simultaneously tapping more of the 594 million Chinese who access the Internet from their smartphones and tablets.

Alibaba’s overseas strategy has seen it start e-commerce sales in Russian Federation, Brazil and India through its AliExpress service.

Still, the e-commerce giants is expected to benefit from its Suning buy-in as the latter has a strong logistical network that Alibaba can tap to counter the underdeveloped infrastructure in China, which makes deliveries to customers challenging, the report added.

And on Wednesday, the firm announced it had struck a deal with Macy’s to feature a selection of the US retailer’s products on its Chinese platforms.

Yet the group has by concerns of increasing regulatory scrutiny in China and the US.

For now, the company’s numbers have been subpar, as the earnings report showed that revenue missed expectations.

Alibaba said if the effect of stopping online lottery sales (which Alibaba suspended in February after pressure from regulators) and the transfer of its SME loan business to Ant Financial is excluded, revenue would have increased 36 percent year-over-year.

The company is putting its online movie ticketing business and movie crowd-funding platform into Alibaba Pictures Group.

Alibaba tanked 5.1% to close at $73.38.

For the June quarter, Alibaba Group reported that non GAAP earnings of RMB3.68 or $0.59 per diluted share, an increase of 21% compared with its earnings in the same period a year ago. 4QFY15 estimates were 2.711 billion, Alibaba is reported to have surpassed the estimates by actually reporting $2.794 billion. We have also launched same-day delivery of groceries, initially starting with Beijing and Shanghai, which has been very successful, with grocery sales in Beijing increasing 740% year-on-year while 90% of orders came from mobile devices.