Alibaba shares plunge after China slowdown in spending

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Alibaba shares fell by over 10% in Hong Kong Trade after Alibaba, a Chinese online retailer giant, warned about a slowdown of consumer spending.

According to the company, its revenue will grow at the slowest rate since 2014’s stock exchange debut.

This weak figure reflects the struggles of the firm with increased competition and Beijing’s regulatory crackdown.

Alibaba shares listed in the US ended Thursday’s New York session with more than 11% less.

In the three months to the end of September, Alibaba’s revenue rose by 29% to 200.7bn yuan ($31.4bn, £23.3bn), its slowest rate of growth for a year and a half.

It also stated that it expected its annual revenue growth to be between 20% and 23%. However, this is less than the analysts had predicted.

Chinese consumers slow down

Alibaba’s chief executive Daniel Zhang explained to investors that the primary causes of the slower growth were increasing competition in China and slowing Chinese consumption.

Chinese buyers are more cautious than ever about spending. There have been new coronavirus epidemics, shortages of power, and concerns over the real estate market.

These figures don’t include the sales of Singles Day or the “11.11 Global Shopping Festival”, an annual shopping event.

After Beijing crackdown on business and China slowing its economic growth, Alibaba’s annual glitzy event this year was more restrained than ever before.

This 11-day event had a slowest sales growth since its inception in 2009. Its attendance was 8.5% higher than last year.

However, customers still spent 540.3 billion yuan above their previous record.

Beijing has been very critical of Alibaba as it is subject to new regulations that are imposed upon the nation’s top technology firms.

After a thorough investigation, Alibaba paid $2.8 billion in fines. Alibaba said that it was changing the way it did business.

This year, the company’s share price has fallen more than three-quarters.

Source: BBC.com

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