Alibaba earnings disappoint

Alibaba on Wednesday posted its poorest performance in more than three years. The Chinese e-retail powerhouse said net income more than doubled to $3.27 billion (2.39 billion euros) in the second quarter ended June 30.

But at "just" 28 percent sales growth, half the average of the past 12 quarters, markets reacted with disappointment, leading to shares falling some 5 percent in premarket trading. Gross merchandise volume (GMV) - the total value of goods bought across Alibaba's platforms - rose 34 percent to $105 billion, also marking the slowest pace since 2012.

Despite the setback, the company remained upbeat, hailing record sales on mobile devices. "(We) made significant progress monetizing our mobile traffic, with our mobile revenue exceeding 50 percent of our total China commerce retail revenue for the first time," said Alibaba CFO Maggie Wu in a Wednesday press release.

Revenue from cloud computing also shot up, more than doubling in the second quarter to $78 million. However, neither was enough to reverse the negative overall results.

Chinese slump

The slowdown comes as the world's second-biggest economy appears to have entered a new era of uncertainty, after years of explosive growth. Looking to stem the tide, the government in Beijing this week moved to devalue the yuan in an effort to make its exchange rate more competitive.

For Alibaba, the downtrend has inspired plans to branch out from its core online-only shopping platforms.

"We are excited about our top strategic priorities, including internationalization, winning in mobile, expanding our ecosystem from cities to villages, and investing in core technologies that will propel our cloud computing business," CEO Daniel Zhang said in a statement.

Fighting back

On Monday, Alibaba said it would invest $4.6 billion in a near-20 percent stake in consumer electronics retailer Suning Commerce Group. And on Wednesday, the firm announced it had struck a deal with Macy's to feature a selection of the US retailer's products on its Chinese platforms.

"We continue to execute our growth strategy and focus on long-term value creation. 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," said CFO Wu.

Part of this strategy will include buying back $4 billion worth of shares over the next two years, a plan which was also announced on Wednesday.

The Hangzhou-based firm made a huge splash last September, when it debuted on the US stock market, shattering all previous records. Since its founding in 1999, the company, which also includes popular platforms Taobao and Tmall, has grown into an e-commerce behemoth, controlling 80 percent of the Chinese market and propelling creator Jack Ma to the top of the list of China's richest people. Today, Alibaba has a market value of $194 billion.

pad/hg (AP, AFP, dpa, Reuters)