Alibaba fails to meet market expectations in Q2 results

Alibaba's Q2 results raised concerns the internet giant’s momentum may be slowing

Alibaba’s record period of growth hit a speed-bump in Q2 with the e-commerce giant failing to meet market expectations, despite posting RMB 85.15bn ($12.4bn) in revenue.

Alibaba’s overall revenue increased 54% year-on-year, however, the growth fell below market forecasts and raised concerns the internet giant’s momentum may be slowing.

Factors including the ongoing trade war between China and the US, China’s slowing economy, as well as market response to Jack Ma’s retirement have all been cited by market experts as potential contributors.

Alibaba’s core e-commerce business continues to drive the lion’s share of revenue, contributing RMB 72.48bn ($10.5bn) – a 56% increase year-on-year. Cloud computing is a huge growth area up 90% to RMB 5.67bn ($825m).

Revenues from digital media and entertainment totalled RMB 5.94m ($865m) – up 24% year-over-year, while innovation initiatives grew 20% to RMB1.06m ($155m).

Alibaba’s active consumers increased 25% to reach 601 million in the year ending 30 June 2018, while mobile active users reached 666 million people in September.

Alibaba’s Q2 performance is usually slightly slower than other quarters as the company prepares for its annual 11.11 Singles Day e-commerce festival, which culminates in a gala event this weekend.

Get The Drum Newsletter

Build your marketing knowledge by choosing from daily news bulletins or a weekly special.