Written by Akash Sriram and Casey Hall
(Reuters) – China’s Alibaba Group Holding Ltd said on Tuesday its fourth-quarter sales fell short of analysts’ expectations as a focus on lower-priced products in response to cautious consumer spending helped boost domestic e-commerce sales. It exceeded my expectations.
But the company’s U.S.-listed shares fell about 3% in premarket trading as fourth-quarter profits fell about 86%.
The company has had a tumultuous year since last March, when it announced the biggest organizational change in its 25-year history, splitting into six divisions and refocusing on its core businesses, including domestic e-commerce. Ta.
Chinese consumers continue to spend cautiously amid an economic slowdown and real estate recession following the coronavirus pandemic.
Alibaba’s domestic commerce arm Taobao and Tmall Group saw double-digit increases in order volume, growing 4% year-on-year.
Analysts expect strong growth from Alibaba’s international digital commerce unit as it invests in building global market share and building global consumer demand for low-cost goods made in China.
According to LSEG data, the sector grew 45% compared to an expected 39% revenue increase. Losses nearly doubled to 4.1 billion yuan ($567 million) from 2.2 billion yuan ($567 million) in the same period last year, as the company made significant investments to maintain price competitiveness and shorten delivery times. It became.
The group’s other “core” business, its cloud division, announced last month that it would cut prices by up to 59% on products that use offshore data centers as competition to attract artificial intelligence software developers intensifies. According to the financial report, AI-related revenue from external customers, a relatively new business, grew by triple digits compared to the same period last year.
According to LSEG data, group-wide revenue for the three months ended March 31 was reported at 221.87 billion yuan, compared to the consensus estimate of 219.66 billion yuan.
Net profit for the March quarter was 3.27 billion yuan ($451.94 million), compared with 23.52 billion yuan a year earlier.
(1 dollar = 7.2339 Chinese Yuan)
(Reporting by Akash Sriram in Bengaluru and Casey Hall in Shanghai; Editing by Sonali Paul, Arun Koyulu and Emelia Sithole-Matarise)
