China slowdown weighs on revenue growth at internet giant Alibaba

Alibaba's revenue had grown more than 50pc for the 10 consecutive quarters prior to the most recent results - AFP

Internet giant Alibaba saw its revenue growth slow in the final three months of last year, in quarterly results likely to stir up concerns over the weaker China market, recently signalled to by US tech giants. 

Alibaba saw net income jump 33pc to 30.96bn yuan (£3.5bn) in the three months to the end of December, and revenue rose 41pc to 117.28bn yuan.

However, shares dipped in New York trading, down 1.3pc, as investors took the results as a sign growth was waning, given Alibaba's revenue had grown more than 50pc for the 10 consecutive quarters prior to the most recent results. 

The 41pc growth announced on Wednesday was the weakest Alibaba had recorded in three years. 

The results follow a warning from Alibaba president Michael Evans earlier this month that China had "slowed down".

Speaking at an event in New York, Mr Evans had said it was a market that "required patience", adding that there were some "troubling headwinds". 

Last week, China posted figures revealing its economic growth in 2018 had been the weakest in 28 years amid tensions with the US and poor consumer confidence.

The country's GDP growth for the year was 6.6pc, down from 2017's 6.8pc. Some economists are predicting growth could slip below 6pc going forward.

Masaaki Kanno, chief economist at Sony Financial Holdings, said: “We still think the Chinese economy could bottom out in the middle of the year.

“There was no surprise from the GDP data but the basic message is that the Chinese economy is still slowing down."

However, David Dai, of Bernstein, said the environment should improve for Alibaba in the second half of 2019 "as the Chinese government introduces measures to stimulate the economy and US China trade war stabilises".

Alibaba is the first of China's big tech companies to report its results for the final three months of 2018, but follows a series of warnings over the state of the China market by US giants Apple, Intel and Nvidia. 

Apple last night said sales of its iPhones slipped by 15pc in the final three months of 2018, largely due to weaker demand in China. 

Speaking about Alibaba's results on Wednesday, however, boss Daniel Zhang was upbeat, saying: "Our resilient operating and financial performance is a direct reflection of our persistent focus on better serving our growing base of nearly 700 million consumers across retail, digital entertainment and local consumer services."