Feeds

Chinese web tat bazaar takes profit hit, 'invests in quality'

Alibaba admits 25% profit droop in Q1 results

Intelligent flash storage arrays

Chinese e-commerce biz Alibaba (1688.HK) has taken a hammering in the last three months as profits fell 25 per cent compared to the same period last year.

A chill in the Chinese economy, combined with investment aimed taking the tat-flogging site more "upmarket" have brought profits down, said Alibaba execs in their pre-results statement for Q1 2012 (PDF).

Alibaba.com provides online services including hosting but is best known for its retail sites – Alibaba.com, a trade platform for importers and exporters, and two Chinese-language wholesale sites – aliexpress.com and 1688.com.

Year on year Alibaba's total revenue for the quarter was up 3.7 per cent compared to the same time in 2011, clocking in at ¥1.589bn (£156.6m).

But net profit for the period was down 25 per cent: the company pulled in ¥38.3m RMB (£33.3m) in profit compared to ¥451.3m (£44.5m) in the equivalent three months in 2011.

Taking e-tat upmarket

In the managers' analysis of the results, Alibaba top brass claimed that they'd been pumping serious investment into improving the quality of its marketplaces and buyer experience and that the swelling spend on "product development" in the past three months had hidden the profits they actually made. Product development spend was up 26 per cent from last year to ¥233m (£23m).

Alibaba execs also admitted they'd felt the impact of the challenging global economic environment and concerns about slow economic growth in China.

Alibaba is currently 40 per cent owned by struggling US web giant Yahoo!, but announced in February that they were taking the company private, which will likely involve a buy-back of Yahoo! holdings.

Separate reports from Reuters suggest that a chill has taken hold of the Chinese small business scene: with political uncertainty affecting investment in small e-business and start-ups – Alibaba's main customers.

Earnings per share were down 20.8 per cent compared to last year, at 8.4 cents in HK$ compared to 10.6 cents in HK$ in 2011. Alibaba's preliminary statement on its 2012 Q1 results can be found here [PDF]. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Spies, avert eyes! Tim Berners-Lee demands a UK digital bill of rights
Lobbies tetchy MPs 'to end indiscriminate online surveillance'
How the FLAC do I tell MP3s from lossless audio?
Can you hear the difference? Can anyone?
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.