SHANGHAI (Reuters) -China’s Alibaba Group Holding on Wednesday missed analysts’ estimates for third-quarter revenue, hurt by softness in the retail market and sagging economic recovery in the world’s second-largest. The company’s U.S.-listed shares, which announced an increase of $25 billion to its share repurchase program through the end of March 2027, were up 3.5% in premarket trading.
Alibaba announced the split of its business into six units last March in a transition overseen by CEO Eddie Wu and Chairman Joe Tsai, both Alibaba co-founders.
Wu, Group CEO since September, has been consolidating his control over Alibaba’s core businesses and has told staff the company’s strategic focuses would be “user first” and “AI-driven” as it combats slower earnings growth.
However, the e-commerce giant is under pressure from a slow recovery in China’s online shopping market after the country lifted its pandemic curbs a little more than 12 months ago. Consumers in the world’s second-largest economy have been cutting costs in response to a stuttering post-COVID recovery, boosting low-cost domestic e-commerce players such as PDD Holdings, which owns Pinduoduo and overseas-focused platform Temu, and prompting Alibaba to increase its focus on discounting and lower-priced goods.
Last year, Alibaba scrapped plans to spin off its cloud business, citing uncertainties over U.S. curbs on exports to China of chips used in artificial intelligence applications.
Meanwhile, Alibaba’s logistics division, Cainiao, has applied to list in Hong Kong, and just last week, sources told Reuters Alibaba was looking to sell a number of consumer sector assets, including its grocery business Freshippo, retailer RT-Mart and shopping mall operator Intime. The company reported revenue of 260.35 billion yuan ($36.19 billion) for the three months ended Dec. 31, compared with 262.28 billion yuan expected by 19 analysts polled by LSEG.
($1 = 7.1941 Chinese yuan renminbi)
(Reporting by Harshita Varghese, Savyata Mishra and Casey Hall; Editing by Himani Sarkar ad Sriraj Kalluvila)
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