Chinese ecommerce leader Alibaba said Wednesday that net profit increased 37 percent in the latest quarter as growth in cloud computing and other business lines helped offset a slowing expansion in core online retail.
The company’s net profit grew to 33.0 billion yuan (USD 4.9 billion) in the October-December third quarter, compared to 24.1 billion yuan over the same period in 2017.
Alibaba dominates China’s emerging consumer culture and its corporate results were widely anticipated for any signs of whether a worsening Chinese economic slowdown and the US-China trade tussle was curbing the country’s appetite for shopping.
Revenue growth slowed to 41 per cent in the quarter, with sales in its core e-commerce business coming in at 40 per cent.
While most companies would envy such earnings, that was the slowest increase in more than two years for a company accustomed to blistering rates in excess of 50 or even 60 per cent.
A consensus of analysts polled by Bloomberg had forecast Alibaba’s revenue to have risen nearly 44 per cent.
China’s GDP grew 6.6 per cent in 2018, the slowest rate in 28 years, according to official figures that sparked concern globally about the direction of the world’s second-largest economy.
That data also showed that full-year retail sales growth slowed slightly to 9.0 per cent.
Alibaba’s earnings were in the spotlight particularly after sales in its 24-hour “Singles Day” shopping extravaganza in November grew 27 per cent, down from a 39 per cent increase the previous year, in what was seen as a symptom of China’s economic slowdown.
The company recently trimmed its fiscal year 2019 annual revenue predictions.