Alibaba's turnover growth slows down to a "mere" 28 %

3.3 billion euro turnover

In the past quarter, Alibaba’s turnover grew from 15.8 billion yuan to 20.2 billion yuan, which is some 3.3 billion euro. Mobile turnover even tripled from 2.5 to 8 billion yuan and represents 55 % of total turnover. That is no surprise given the explosion in active mobile users: 307 million in the past quarter, compared to 289 in the preceding quarter and 188 million the same quarter last year.

Net profit reached 30.8 billion yuan (4.3 billion euro), up 148 % compared to the 12.4 billion yuan from last year’s quarter, but the increase is mostly because of the sale of its stake in Alibaba Pictures, which bumped up the numbers with an additional 3.5 billion euro.

Turnover growth slows down

Its strong performance cannot hide the fact that Alibaba’s turnover growth is slowing down. When it presented its previous quarterly results, it managed a 45 % turnover growth, which has now slowed down to 28 %. It did manage to sell 34 % more items on its platforms over an entire year, but that is still the lowest number of the past 3 years.

Analysts believe the slower growth comes down to market saturation in major Chinese cities, which limits Alibaba’s ability to draw in new customers down to levels from 3 years ago. All in all, Alibaba now has 367 million users, “only” 17 million more than in the previous quarter. The company has also diverted its attention to m-commerce through smartphones and tablets, which is weighing down on its advertising income. It does perform well in the so-called cloud services, as those doubled their turnover in a year’s time.

The company also announced it would buy back 4 billion dollars’ worth of shares to boost its stock value. In September 2014, it was the largest IPO ever in New York, but it has already lost nearly half of its value since then. The current numbers were also not the liking of most investors.