Alibaba Group reports lower-than-expected quarterly revenue

China’s Alibaba Group Holding Ltd reported lower-than-expected quarterly revenue on Friday, another sign of slowing momentum for China’s giant e-commerce platforms and its economy.

Alibaba’s stock has fallen more than 12 percent this year, weighed down by concern about the planned retirement of founder-Chairman Jack Ma, declining margins and concerns about the impact of a U.S.-China trade spat on ad spending, reports Reuters.

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The volume of business normally slow in the second quarter ahead of Alibaba’s Singles’ Day sale, which peaks on Nov. 11.

Alibaba Group

The logo of Alibaba Group is seen at the company’s headquarters in Hangzhou, Zhejiang province in China

Core e-commerce revenue, which accounts for 84 percent of the total, rose 56 percent to 72.48 billion yuan in the second quarter.

Profit margins remained tight as Alibaba invested heavily in logistics, offline retail and cloud computing. Revenue from cloud computing grew 90.5 percent to 5.67 billion yuan and about 24 percent in entertainment and digital media to 5.94 billion yuan.

Sales in both the third and first quarters are increasingly cannibalized by the shopping bonanza surrounding Singles’ Day, which last year generated over $25 billion in sales at Alibaba and around $19 billion at competitor Inc.

The date, Nov. 11, was originally a tongue-in-cheek student holiday to celebrate single people, countering Valentine’s Day, but has since become synonymous with e-commerce sales.

Excluding items, the company earned 9.60 yuan per share, above the analysts’ average estimate of 7.41 yuan per share.

Revenue rose 54.5 percent to 85.15 billion yuan ($12.39 billion) for the three months through September, compared with the expectation of 86.51 billion yuan, according to IBES data from Refinitiv. Net income attributable to ordinary shareholders rose 13 percent to 20.03 billion yuan, or 6.78 yuan per share.

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