Business Maverick: Alibaba Sales Better Than Feared Despite Economic Turmoil

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Alibaba Group Holding Ltd. posted better results than many investors feared, avoiding a sharp sales contraction while signaling an improvement in Chinese consumer sentiment in recent months.

Its shares rose more than 6% in New York. Alibaba’s revenue slid for the first time on record in the June quarter, albeit by a fractional amount that was less than analysts projected. The contraction markedto a decade of sizzling growth for China’s internet giants, which began to wind down in 2021 when regulators slapped curbs on a range of sectors from e-commerce to social media.

China’s e-commerce leader reported revenue of 205.6 billion yuan in the June quarter, enough to beat projections for 204 billion yuan. Net income fell 50% to 22.7 billion yuan, though Alibaba trimmed losses at newer businesses like local services and the cloud.near-economic contraction in China. Smaller rival JD.com Inc., which escaped the worst of the crackdown, is overtaking Alibaba in sales growth, while up-and-coming competitors such as ByteDance Ltd. to Pinduoduo Inc. are drawing more users away.

But consumption began recovering from June and quickened in July, Chief Executive Officer Daniel Zhang said. That outlook helped drive gains in Chinese internet peers from JD to Baidu Inc. and Pinduoduo that are heavily reliant on the“Starting in July, we are seeing a gradual recovery of business performance compared to June, especially in the relatively more impacted categories in the past few months such as fashion and electronics,” he told analysts on a conference call.

, which experts linked to Alibaba’s cloud business. That division grew sales 10% in the quarter, the slowest pace on record.

 

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