Alibaba is still growing, just not as fast as it was in the past.
On Friday, the Chinese e-commerce giant’s results for the third quarter ended Sept. 30 and its outlook for the future were mixed — growing, but not as strongly as hoped. Net income rose 14 percent to 20.1 billion yuan, or $2.9 billion, while revenue grew 54 percent to 85.1 billion yuan. Still, the top line came in below analyst expectations of 86.5 billion yuan.
Alibaba’s active users also increased by 25 million to 601 million for the 12 months ending June 30. That’s good news for the e-commerce company that accounts for nearly two-thirds of China’s online retail marketplace.
Maggie Wu, chief financial officer of Alibaba Group, said the quarter was “tempered by significant investments in local services, logistics, entertainment and international expansion.” But she also pointed out, “We outpaced all industry peers.”
Even so, Alibaba lowered its 2019 fiscal year revenue guidance. The company earlier anticipated year-end revenue growth of about 400 billion yuan, but now estimates it will be closer to between 375 billion yuan and 383 billion yuan.
“We have eliminated the ‘e’ from e-commerce as the distinction between online and off-line sales goes away when shoppers buy from anywhere, any time using a mobile phone,” Joseph Chung Tsai, executive vice chairman of Alibaba, said during a conference call with analysts.
“This is made possible by digitizing the entire consumer journey, inventory tracking and logistics workflow,” Tsai said. “We expect a value creation from traditional retailers’ increased sales and more efficient operations.”
Company shares were up more than 6 percent during pre-market hours but were down 1.4 percent to $149.09 in midday trading.