Alibaba’s sales growth slows and profit falls

Alibaba, China’s biggest e-commerce company, reported its slowest sales growth in a year and a half Thursday, the effect of Beijing’s regulatory clampdown on internet giants and tough competition from rival online retail destinations in China.

On a conference call with analysts, Alibaba’s chief executive, Daniel Zhang, also blamed “economic headwinds” for the weak results. China’s economic growth was slower in the July-toseptember period than in the quarter before.

Retail sales growth has been bumpy. Alibaba’s revenue for the latest quarter increased 29% from a year earlier.

Profit shrank 81%, which the company attributed to increased spending on newer businesses such as its Lazada shopping platform in Southeast Asia.

Other factors depressing Alibaba’s earnings relate to the Chinese government’s campaign to stop internet companies from behaving in ways it considers unfair or anticompetitive. In April, the country’s antitrust regulator fined Alibaba a record $2.8 billion for restricting the merchants on its virtual bazaars from selling on other platforms.

Two days later, Alibaba pledged to go further to help those merchants by lowering the fees it charges them and by spending on new services for them. Income from such fees — Alibaba’s largest source of revenue — grew just 3% in the latest quarter, in part because of the initiatives.

The company’s increased spending to support vendors also crimped its profit.

As overall economic growth slows in China, Alibaba is having to compete more fiercely for customers against old foes such as Jd.com and Tencent’s Wechat social platform and newer apps such as Pinduoduo and Douyin, the Chinese version of Tiktok.