SHANGHAI — Alibaba‘s third quarter results showed the lasting effects of COVID-19.
For the three months ended Dec, 31, Alibaba reported 2 percent year-over-year growth to 247.76 billion renminbi, or $35.9 billion, slightly better than Wall Street’s forecasts, the company revealed on Thursday.
In the previous quarter, revenue flatlined at 205.56 billion renminbi, or $29.6 billion at current exchange rates.
According to the National Bureau of Statistics, China’s retail sales of social consumer goods dipped 0.2 percent, but online retail sales grew 4 percent year-over-year in 2022.
Alibaba’s net income in the third quarter increased 138 percent year-over-year to 45.7 billion renminbi, or $6.6 billion, driven by a 22.4 billion renminbi, or $3.2 billion, divestment of its digital media and entertainment segments.
Gross merchandise value at the e-commerce giant’s core China commerce business declined mid-single-digit year-over-year, excluding unpaid orders. The decline was primarily driven by a weakening fashion and accessories category, due to supply chain and logistics disruptions caused by a surge in COVID-19 cases in December.
For the first time in 14 years, Alibaba and its rival JD.com didn’t release Singles’ Day sales data, the most important online shopping festival of the year.
The company’s international commerce business, which includes Lazada and AliExpress, Trendyol and Daraz, grew 3 percent year-over-year, mainly driven by order growth at Trendyol, the Turkish e-commerce platform.
“We delivered a solid quarter despite softer demand, supply chain and logistics disruptions due to the impact of changes in COVID-19 measures,” said Daniel Zhang, chairman and chief executive officer of Alibaba.
“Looking ahead, we expect continued recovery in consumer sentiment and economic activity,” Zhang added. According to the International Monetary Fund’s estimate, China’s economy is projected to grow 5 percent in 2023.
Toby Xu, chief financial officer at Alibaba, said improved operating efficiency and cost optimization drove profit growth. “Our net cash position remains strong and we continue to generate healthy cash flow,” said Xu. In the December quarter, Alibaba initiated a $3.3 billion share buyback program to increase shareholder value.