China's Alibaba Group Holding Ltd reported its slowest-ever increase in quarterly revenue since going public in 2014, as tepid growth in its core e-commerce business and intensifying competition ate into sales.
The slowing Chinese economy has taken a toll on the e-commerce company, as consumers cut back discretionary spending.
During its annual Singles' Day promotional event last November, the company recorded gross merchandise value growth of 8.5%, a record low.
Alibaba is also facing intensifying pressure from rivals like TikTok-owned ByteDance and Kuaishou, who have capitalized on the booming trend of livestreaming e-commerce.
In its fiscal third quarter, Alibaba re-organised its financial reporting of certain business segments to highlight new areas of growth.
International commerce reached 16.45 billion yuan (€2.33 billion), up 18%. Local consumer services, which includes the company's food delivery apps, generated 12.14 billion yuan (€1.72 billion), up 27% from a year ago.
Ant Group, Alibaba's fintech affiliate, posted a profit of about 17.6 billion yuan (€2.49 billion) for the quarter ended September, according to Alibaba's filings, compared with 19.7 billion (€2.79 billion) yuan in the previous quarter and 15 billion (€2.12 billion) yuan a year ago.
The group has been subjected to a sweeping restructuring by China, which derailed its $37 billion initial public offering in late 2020.
Alibaba's shares were down about 3% in New York before the opening bell. They fell about 5% before the results were announced, tracking losses in global shares after Russia launched an all-out invasion of Ukraine.
Net income attributable to shareholders slumped to 20.43 billion yuan (€2.89 billion) in the third quarter from 79.43 billion yuan (€11.25 billion) a year earlier.
Revenue rose about 10% to 242.6 billion yuan (€34.35 billion). Analysts on an average had expected revenue of 246.37 billion yuan (€34.89 billion), according to Refinitiv data.
On an adjusted basis, Alibaba earned 16.87 yuan per American Depositary Share, above expectations of 16.18 yuan.