Chinese eCommerce giant Alibaba experienced a slowing sales growth during the month of September, leading to its slowest sales pace in its history for this specific time period.
As a result, Alibaba shares slumped by more than 4% on the New York Stock Exchange. Also of concern is the tightening regulations faced by Alibaba’s sister company, Ant Group Co., which forced the business to call off its $35 billion IPO. Alibaba owns a 32% share in the FinTech company.
“As Ant Group’s major shareholder, Alibaba is actively evaluating the impact on our business in response to the recently proposed changes in the fintech regulatory environment,” Alibaba CEO Daniel Zhang reassured analysts on a conference call. The majority of Alibaba’s online payment transactions are fueled by Ant’s Alipay mobile wallet.
Alibaba earned a profit of 4.7 billion yuan from its investment in Ant during the September quarter. This is a mere fraction of the 155.1 billion yuan ($23.4 billion) total revenue that the eCommerce giant reported for the September quarter, thus matching analysts’ projections.
Following its record low number in March following the COVID-19 outbreak, Alibaba has enjoyed a gradual share growth amassing to approximately 60%.
