China’s e-commerce giant Alibaba recorded a net loss, while revenue grew slowly in the third quarter as COVID control restrictions and economic downturn hit consumer spending. 

Its revenue increased by 3% to 207.2 billion yuan ($29 billion), below expectations of 209 billion yuan ($29.23 billion). It posted a net loss of $2.9 billion versus estimates for a profit of $2.64 billion.

Reuters reported that Alibaba’s customer management revenue, which tracks how much merchants spend on the platform, fell 7% year on year. This is the business division’s most significant drop, representing 30% of the company’s total revenue.

Alibaba’s CEO, Daniel Zhang, said that weakening consumer demand and COVID resurgence “affected one area after another, resulting in abnormal or suspended logistics service in different places.”

China’s official data for retail sales, an indicator of consumption, dropped for the first time since May. Retail sales declined 0.5% compared with a 2.5% rise in September and missed the expectation of a 1.0% rise for the period.

Last week it did not release the final sales tally of this year’s Singles Day shopping event for the first time in 14 years, saying the gross merchandise value was the same as last year. Experts noted that Alibaba’s undisclosed data on sales indicates a disappointing result for its most important shopping event.

According to Bloomberg, while Alibaba Singles’ Day sales see no increase this year, smaller competitor JD.com surpasses Alibaba in sales growth and makes another record during China’s biggest shopping event. 

As Hong Kong’s stock market plummeted to a record low last month, the Chinese e-commerce giant’s stock reportedly lost around 77% in two years, wiping out $637 billion in market value. 

Its shares reached an all-time high of about $39 in October 2020, and it was the most valuable Chinese firm at the time.

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