Alibaba’s Torrid Sales Growth Slows to 28%

The e-commerce giant had sales of $3.26 billion in the second quarter but the numbers suggest it is "coming back to Earth."
Katie Kuehner-HebertAugust 12, 2015
Alibaba’s Torrid Sales Growth Slows to 28%

Nearly a year after its record-breaking, $25 billion IPO, Alibaba on Wednesday reported lower-than-expected second-quarter revenues, sparking a 5% decline in its stock price.

The China e-commerce giant’s revenue for the quarter ending June 30 rose 28%, to $3.26 billion—its slowest growth in three years—missing analysts’ estimates of $3.39 billion.

Alibaba’s stock closed Wednesday at $73.50, down about 5%. After climbing as high as $120 in November, it is now just 8.1% above its initial public offering price of $68.

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

CFO Insights on Inflation, Workforce Challenges, and Future Plans 

Download our 2022 survey report for a high-level view of finance team projections and strategies, directly from our executive readers.

Alibaba attributed the slower revenue growth to a Chinese government order suspending all online lottery sales, lower fees from its group-buying and flash sales site, and the transfer of its small-loans business to its financial affiliate.

“We continue to execute our growth strategy and focus on long-term value creation,” Alibaba CFO Maggie Wu said in a news release. “The fundamental strength of our business gives us the confidence to invest in new initiatives, add new users, improve customer experience and expand our products and services.”

But The Wall Street Journal said the earnings report shows that Alibaba’s stellar growth “is coming back to Earth.”

The company “faces slowing revenue growth, an expensive campaign to court mobile phone users and challenges in managing a business that is expanding into everything from logistics to cloud computing to show business,” the WSJ wrote.

An analyst said the slower growth was also likely the result of management changes that began with the shuffling of top ranks at Alibaba’s shopping platforms in March. The move saw three major business units — Taobao, Tmall and Juhuasuan — folded into one.

Mobile transactions continue to be a bright spot for Alibaba, accounting for 55% of overall transactions in the second quarter, up from 51% in the March quarter and 33% in the prior-year period. The number of active users on Alibaba’s mobile platforms increased to 307 million at the end of the quarter from 289 million in March and from 188 million a year ago.


4 Powerful Communication Strategies for Your Next Board Meeting