By Coco Liu

18 Nov 2021

  •  Outlook fell short as quarterly sales numbers missed estimates
  •  China’s e-commerce leader struggling with slowing consumption

Alibaba Group Holding Ltd. outlook for fiscal 2022 revenue fell short of estimates after intensifying competition and new coronavirus outbreaks compounded regulatory headwinds for China’s top e-commerce firm.

The disappointing forecast followed sales that missed analyst estimates for a second straight quarter. Alibaba posted a less-than-expected 29% rise in revenue for the September quarter to 200.7 billion yuan ($31.4 billion). It forecast 20% to 23% growth in fiscal 2022 revenue, short of the 27% that analysts were projecting. Net income plummeted 81% to 5.4 billion yuan, lagging estimates after the internet giant marked down the value of equity investments.


The lackluster numbers underscore the former stock market darling’s struggle to revive businesses walloped by macroeconomic, regulatory and competitive turmoil. Revenue growth at a plethora of divisions including its Cainiao logistics arm and local on-demand services underperformed expectations, while bread-and-butter customer management revenue from platforms like Taobao and Tmall grew just 3% — the slowest in at least five quarters. Alibaba’s stock fell more than 4% in pre-market trading in New York.

Competition is intensifying just as China grapples with the widest Covid-19 outbreak since the virus first emerged in Wuhan. Rivals like Inc. and Pinduoduo Inc. are stepping up investments to win over Alibaba’s users, even as that resurgence in coronavirus cases across many parts of China dents consumer spending and hurt economic growth. Gross domestic product expanded 4.9% in the September quarter, cooling from the 7.9% growth in the previous period, partly because of lockdown measures across many cities.

Alibaba's disappointing outlook reflects the multiple uncertainties it faces this year

Pinduoduo this year surpassed Alibaba as the largest Chinese e-commerce platform by annual active shoppers, reaching 849.9 million users in the 12 months to June. Meanwhile, has been attracting new and returning brands like Starbucks and Estee Lauder to its platforms, taking advantage of Beijing’s edict to end exclusivity arrangements previously imposed upon merchants.

Alibaba has lagged behind many of its largest peers in 2021

The slowdown at Alibaba looked set to extend into a December period that included Singles’ Day, the year’s biggest shopping festival. Alibaba last week reported sales of $84.5 billion during the blockbuster event, reaching yet another record. But the 8.5% increase was a stark slowdown from previous years, as the company eschewed high-profile promotions to focus on sustainability and philanthropy —  key pillars of President Xi Jinping’s drive to achieve “common prosperity.”


Alibaba’s sales fell short of expectations for the first time in more than two years during the June quarter, battered by an antitrust probe that ended in a record $2.8 billion fine. Since Beijing kicked off its tech crackdown a year ago, the campaign has grown to encompass areas from fintech to data privacy, online advertising as well as content — arenas Alibaba depends on to drive growth beyond its core business.

Alibaba may expedite investments into newer services such as Taobao Deals and Taocaicai in 2022 to counter rising competition on its existing commerce businesses. The company’s gross merchandise value (GMV) gain of 8% from the 2021 Singles’ Day shopping vs. a year earlier compared to rival’s 29% reflects rising pressure on the internet giant to fan growth over the next 12 months, even if it meets expectations for a 6% year-over-year rise in fiscal 2022 GMV.

Catherine Lim and Tiffany Tam, analysts