July 24, 2022 This illustration features a shopping trolley in front of the Alibaba logo. REUTERS/Dado Ruvic/Illustration/File Photo
Aug 10 (Reuters) – China’s Alibaba Group Holding ( 9988.HK ) reported first-quarter earnings on Thursday that beat analysts’ estimates as consumer sentiment improved at the same time as severe pandemic-related lockdowns from a year ago.
Alibaba posted revenue of 234.16 billion yuan ($32.29 billion) in the quarter, compared with analysts’ estimates of 224.92 billion yuan, according to Refinitiv data.
The company’s US-listed shares were up nearly 4% in pre-market trading.
The latest earnings numbers indicate flat 3% growth over the past four quarters.
However, the earnings come at a time of heightened fears about China’s economy, which has stumbled after an initially brisk recovery from the lockdowns. On Wednesday, China announced that the consumer price level went into deflation in July – which is expected to further weigh on consumer spending.
Revenue from the first quarter to the end of June was helped by a recovery in consumer purchases on Alibaba’s Taobao and Tmall marketplaces as part of the 618 shopping festival, China’s second-biggest online shopping event in June.
Customer management revenue, which tracks how much merchants spend on Alibaba, rose 10% to 79.7 billion yuan, thanks to an increase in merchants’ willingness to invest in advertising and higher sales during the festival.
It was the last earnings announcement under Alibaba CEO and Chairman Daniel Zhang, who will step down in September to focus on leading its cloud division.
The CEO role will be handed over to Eddie Yongming Wu, head of Alibaba’s Taobao and Tmall Group, while executive vice president Joseph Tsai will take over as chairman.
Regulatory concerns have eased for China’s tech companies, including Alibaba, this year, with Chinese officials eager to boost private sector confidence. But China’s faltering economy and growing competitive pressure from smaller rivals such as PDD Holdings ( PDD.O ) and Douyin, the Chinese version of TikTok, pose major challenges for Alibaba.
(1 Chinese Yuan Renminbi = $0.1387)
Yuvraj Malik reports in Bangalore; Editing by Shonak Dasgupta and Sharon Singleton
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