Chinese e-commerce giant Alibaba said second quarter revenue growth slowed to 40 per cent on-year Friday, although net profits more than tripled thanks in part to a one-time payment from a fintech affiliate.
Total revenue was 119 billion yuan (USD 16.9 billion), with growth down from 42 per cent in the April-June period and 54 per cent in last year's second quarter, a company statement said, in its first earnings report since founder Jack Ma stepped aside as chairman in September.
The second quarter jump in net profits was partly due to a one-time payment received in September as part of a deal in which Alibaba acquired 33 per cent equity in fintech affiliate Ant Financial while ending a previous profit sharing arrangement, the company said.
In a presentation to investors Friday Alibaba attributed the group's continued revenue growth -- which comes amid a slowdown in the world's number two economy -- to "robust" expansion of its China retail and cloud businesses.
Cloud computing was the among the fastest growing revenue sources for the company, with revenues from the segment growing 64 per cent year-on-year to 9.2 billion yuan.
Net income attributable to ordinary shareholders at the group jumped 262 per cent in the July-September period from a year ago, to 72.5 billion yuan (USD 10.1 billion).
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Nearly 60 per cent of companies listed in China used Alibaba's cloud services as of August 2019, the company said, thanks in part to digitisation in the public sector and traditional industries.
"With sustained consumer engagement and spending across the Alibaba Economy, we have continued our revenue and profit growth," Maggie Wu, Chief Financial Officer of Alibaba Group, said.
Ma, who founded the company in 1999, handed the reins over to a team of executives led by CEO Daniel Zhang in September.
Friday's results come days ahead of Singles Day on November 11, the largest shopping holiday of the year in China.
Last year, merchants on Alibaba's e-commerce platforms moved 213.5 billion yuan worth of merchandise during the shopping bonanza.
Alibaba dominates China's rapidly expanding consumer culture and its corporate results are closely watched for any signs that a Chinese economic deceleration or US-China trade tensions are impacting spending.
Companies such as Alibaba are at the nexus of a national economic strategy to encourage more domestic consumer spending and thereby lessen the reliance on fickle foreign demand for Chinese exports.
Nevertheless, in September, Alibaba said it had bought Kaola, one of China's top online shopping platforms for foreign brands, from fellow internet titan Netease for about USD 2 billion.