China : Alibaba revenues slip; battle looms with JD.com

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Alibaba revenues slip; battle looms with JD.com

27
Jan '16

Chinese e-commerce giant Alibaba Group Holding Ltd is expected to post its weakest quarterly revenue growth on record, according to Thomson Reuters data. Analysts say the slowdown will heat up the battle with smaller rival JD.com Inc in a tougher economy.

Alibaba's revenue for the quarter ending December is projected to grow at 26.6 per cent, according to a Thomson Reuters SmartEstimate survey of 28 analysts, which would be the slowest rate since the company started publishing such data three and a half years ago.

The pace also lags the 47-51 per cent revenue growth JD.com projected for the same period, which is also the slowest expansion since the company started releasing records.

Alibaba and JD.com declined to comment, citing the pre-earnings quiet period.

JD.com has focused on more affluent shoppers in China's biggest cities, a strategy that may be paying off in an economy that last year grew at its slowest pace in 25 years, the Reuters report said.

While the two companies calculate the total value of goods sold - known as gross merchandise volume (GMV) - differently, JD.com's GMV grew 82 per cent in the nine-months to September while Alibaba's rose 34 per cent, suggesting China's biggest e-tailer was losing market share.

Earlier this month, Alibaba Chief Executive Daniel Zhang said the company will pivot towards these "first-tier" cities like Beijing, Shanghai, Shenzhen and Guangzhou, after having trumpeted a push into China's countryside, as well as abroad.

This may be a tough ask, as quality concerns still dog Alibaba and as JD.com has already carved out its own space in these cities by offering speedy delivery and quality assurances, the report said. (SH)

Fibre2Fashion News Desk - India

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