Alibaba revenue growth seen to be slowest on record
Shanghai/Beijing, January 25
Chinese e-commerce giant Alibaba Group Holding Ltd is expected to post its weakest quarterly revenue growth on record, Thomson Reuters data shows, a slowdown analysts say will heat up battle with smaller rival JD.com Inc in a tougher economy.
Alibaba’s revenue for the quarter ending December is projected to grow at 26.6 per cent, according to a Thomson Reuters SmartEstimate survey of 28 analysts, which would be the slowest rate since the company started publishing such data three-and-a-half years ago.
The pace also lags the 47 to 51 per cent revenue growth JD.com projected for the same period, which is also the slowest expansion since the company started releasing records.
Alibaba and JD.com declined to comment, citing the pre-earnings quiet period.
“When the market starts to slow, you start to have real winners and real losers,” said Brian Buchwald, chief executive of consumer intelligence company Bomoda. “I think that they need to pay attention to their immediate competition.”
JD.com has focused on more affluent shoppers in China’s biggest cities, a strategy that may be paying off in an economy that last year grew at its weakest pace in a quarter of a century.
While the two companies calculate the total value of goods sold — known as gross merchandise volume (GMV) — differently, JD.com’s GMV grew 82 per cent in the nine-months to September while Alibaba’s rose 34 per cent, suggesting China’s biggest e-tailer was losing market share.
Earlier this month, Alibaba Chief Executive Daniel Zhang said the company will pivot towards these ‘first-tier’ cities like Beijing, Shanghai, Shenzhen and Guangzhou, after having trumpeted a push into China’s countryside, as well as abroad.
In an article on Alibaba’s blog page, Zhang also said the firm was seeking to retain and win over more customers by ‘enhancing reputation and optimising user experience’.