Alibaba's Q4 cloud revenue up 84 percent from a year ago

China slowdown weighs on revenue growth at internet giant Alibaba

Chinese shoppers conjure up strong sales at Alibaba

Revenue growth, the key measure of the company's business health, indeed slowed in the quarter.

The positive result by Alibaba which is the first of China's internet giants to report its earnings may bring a much-needed boost to China's slowing economy.

The company said sales from core commerce increased 40% year-over-year to 102.8 billion Chinese yuan ($14.96 billion) and its cloud-computing revenue surged 84% YoY to 6.6 billion Chinese yuan ($962 million).

According to the New York Times, "Its revenue was slightly below analysts' expectations, growing 41 percent, its slowest pace since early 2016, reflecting both the sheer size of the company and widening troubles in the Chinese economy, the world's second largest".

Hangzhou-based Alibaba posted 117.28 billion yuan ($17.5 billion) in quarterly revenue on Wednesday, versus 119.08 billion yuan estimated by FactSet. Another highlight of the forth quarter would be the double eleven global shopping festival, when Cainiao, the logistics arm of Alibaba processed over 1 billion delivery orders.

Last year Alibaba netted a record $30-billion from Singles' Day.

Alibaba beat on earnings, but missed on sales.

China's economic growth in 2018 slowed to its weakest in nearly 30 years, with growth expected to decline even further this year.

"The healthy balance sheet of Chinese households and the increasing availability of credit will fuel consumption", Tsai said on Wednesday.

On the same call, Zhang said the company remains optimistic despite facing uncertainties, adding that younger buyers were driving sales.

The e-commerce giant's margins will likely remain under pressure, but its work to innovate has produced a series of business initiatives, like Hema stores, video and payments, that have long ramps to growth, they said.

Companies like Alibaba are at the nexus of a national economic strategy to encourage more domestic consumer spending and thereby lessen the reliance on fickle foreign demand for Chinese exports.

The strong growth in Alibaba's cloud computing was primarily driven by increased spending from enterprise users.

Latest News