Alibaba Group disclosed Tuesday mixed results for the quarter ended June 30, as the Chinese e-commerce company has become the primary target of China's ongoing regulatory clampdown on the tech sector.
The company's net income attributable to stakeholders fell by 5% at nearly $7 billion. Using the non-GAAP measures that Alibaba prefers, net profits weakened by 7% to $6.73 billion, reports show.
China's regulatory pressure on the tech sector over the past three quarters has caused jitters among investors, wiping more than $200 billion from the value of leading companies.
This comes at a time when China's economic landscape, especially its digital economy, bounced back from the pandemic far faster compared to countries in the West.
The e-commerce group's results mirror those of rival e-commerce company Amazon.com in the U.S., as the loosening of pandemic-related curbs has resulted to more consumers visiting brick and mortar stores rather than ordering online.
Growth weakened in most of Alibaba's key units from cloud to e-commerce, underlining concerns the growing list of new regulations is impeding expansion initiatives and adding to companies' headaches, according to Bloomberg.
In a sign of the current state of the economy, Alibaba chief executive Daniel Zhang endorsed Tuesday a series of measures imposed during a rocky 2021, from tightened restrictions on data collection to excessive subsidies.
The company's revenue for the June quarter was up to RMB205.5 billion from RMB153.7 billion, while market observers monitored by FactSet were modeling RMB209 billion, Market Watch reported.
Alibaba's revenue was up 34% to RMB180.24 billion in the quarter, compared with projections of RMB184.23 billion. Income from operations fell 10% to RMB30.83 billion, or $4.76 billion, year over year.
According to Maggie Wu, Alibaba chief financial officer, the company is investing its excess profits and surplus capital to support its merchants and pour money in strategic locations to better serve clients and make a strong foray into new markets.
Over the last couple of years, Alibaba has earned both name and popularity in the e-commerce space, and for good reason. As it recovers from the coronavirus outage, investors will be keeping close tabs to see whether this Chinese behemoth can keep its e-commerce momentum as physical stores re-open.
