China's Alibaba Group Holding beat analysts' estimates for fourth-quarter revenue as a focus on low-cost goods in response to cautious consumer spending helped boost domestic e-commerce sales.
Its US-listed shares, however, fell around 3% in premarket trading, as profit fell about 86% in the fourth quarter.
The company has had a tumultuous year since announcing the biggest shake-up in its 25-year history in March last year, splitting into six units and refocusing on its core businesses, including domestic e-commerce.
Consumers in China have been spending carefully after the COVID-19 pandemic amid an economic slowdown and property slump.
Alibaba's domestic commerce arm, Taobao and Tmall Group, grew 4% year-over-year with order volume increasing double-digits.
Performance Highlights
Analysts expected strong growth from Alibaba's international digital commerce arm, given its investments in building global market share and appetite among global consumers for low-cost goods from China.
The segment delivered with 45% growth, compared with an expected 39% revenue rise, according to LSEG data. It also saw losses nearly double to 4.1 billion yuan ($5667 million) from 2.2 billion a year ago as it invested heavily to remain price competitive and shorten delivery times.
The group's other 'core' business, its cloud division last month said it would cut prices by as much as 59% for products that are powered by its offshore data centers, amid rising competition to attract artificial intelligence software developers. According to the earnings report, AI-related revenue from external customers, a relatively new business, grew at triple-digits year-on-year.
The group overall reported revenue of 221.87 billion yuan in the three months ended 31 March, compared with a consensus estimate of 219.66 billion yuan, according to LSEG data.
Net income in the March-quarter was 3.27 billion yuan ($451.94 million), compared with 23.52 billion yuan a year ago.
