The company reported a fall in profit of nearly 30 percent in the latest quarter, the first such decline in a year and a half. One reason: Alibaba got a bump in profit last year from selling its shares in a social media app. Another culprit, however, was heavy spending on Alibaba’s businesses outside of e-commerce, including cloud computing and brick-and-mortar retail — which the company, counterintuitively, likes to call “new retail.”
Those ventures are part of Alibaba’s plan to broaden its empire and become more of a full-service technology company akin to Google. But some investors appear to be fretting about the cost of such expansion to the company’s profits. Alibaba has already lost around $60 billion in market value since its shares peaked in January.
They remain well above their level a year ago, however, thanks to strength in Alibaba’s core online business. In the first three months of the year, total revenue increased by more than 60 percent over the same period last year, the company said Friday. It added that it expects a similar pace of sales growth for the coming financial year.
Source: NY Times