Alibaba’s 1Q sales short of expectations, shares fall

Revenue rose 28 percent to 20.25 million Chinese yuan ($3.27 billion), from 15.77 billion Chinese yuan a year ago.

On August. 7, JD.com announced it would invest 4.31 billion yuan (around US$700 million) to acquire a 10% stake in Yonghui Superstores, a leading hypermarket and supermarket chain in China.

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. Alibaba released its earnings for the three months through June on Wednesday morning, and the firm’s failure to meet Wall Street’s forecasts has numbed those with Yahoo shares. The same period from the previous year had $2.54 billion in revenue.

The company’s board authorized a share repurchase program of up to US$4 billion.

With sales growth slowing in China, Alibaba is looking across its borders to give sales a boost.

“Online shopping in larger cities in China has already reached saturation”, Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP, said by phone before the earnings.

The fall in revenue growth come as crass trade level (GMV) or the whole importance of items transacted across Alibaba’s base or roze wijn 34 percentage, also going up at its slowest stride in more than three years.

Announcing the partnership at a press conference, Alibaba’s executive chairman and founder Jack Massachusetts said that both e-commerce and traditional commerce sectors are suffering operating hardships and only through combining can they ensure viable operations.

Alibaba shares fell 6.01 percent to $72.69 in pre-market trading.

The company recently invested in a diverse range of projects. Mobile revenue from the China commerce retail business rose 352% to $846 million, or 40% of the company’s total China commerce retail business.

Alibaba brought former Goldman Sachs Group Inc. partner Michael Evans as president this month to help its global push in August. JD’s direct sales GMV growth of 65% bodes well for Tmall, which has been tracking this metric fairly closely for several quarters.

There is a storm brewing in the Chinese stock market, and possibly the wider economy, and traders are anxious that a dampened outlook in the country will hit Alibaba Group Holding’s value. In January, a report by the State Administration for Industry & Commerce accused Alibaba of allowing merchants to operate without required business licenses, to run unauthorized stores that co-opt famous brands and to sell fake wine and handbags.