Chinese e-commerce giant Alibaba posted lower-than-expected profit today (August 12th), unveiling its slowest quarterly growth in three years.
Revenue was $3.2 billion (£2.05 billion), up 28 per cent compared with last year. However, analysts' expectations were $3.39 billion, which led shares of the company to fall seven per cent after the opening bell in New York.
Profit surged 148 per cent to $4.97 billion, or $1.92 a share. The company also saw sales volume increase by 34 per cent. Gross merchandise volume, or the total value of goods sold through the marketplace, grew 34 per cent, the slowest pace since 2012.
According to the Wall Street Journal, revenue growth was hurt by the effect of a government order earlier this year for all online lottery sales to be suspended, as well as reduced fees from Alibaba’s group-buying and flash sales site.
Mobile phone revenue soars
The company reported a jump in revenue from people buying on mobile phone and tablet devices. Mobile transactions grew to 55 per cent of Alibaba’s overall transactions in the quarter, up from 33 per cent a year ago.
Alibaba Group's chief financial officer Maggie Wu said: "We made significant progress monetising our mobile traffic, with our mobile revenue exceeding 50 per cent of our total China commerce retail revenue for the first time."
Meanwhile, the Chinese e-commerce giant revealed it has authorised a $4 billion stock-buyback program, which will be spread over two years.
The results come almost a year after Alibaba's record-breaking $25 billion flotation in New York in September 2014. Founder Jack Ma has said that the company is committed to spread its business aggressively into the US and Europe.
The e-commerce giant currently accounts for 80 per cent of all online retail sales in China. About two-thirds of its sales come from advertising and marketing services on the group's consumer-to-consumer marketplace Taobao.
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