Feeds

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

Alibaba admits 25% profit droop in Q1 results

Choosing a cloud hosting partner with confidence

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]. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Doctor Who's Flatline: Cool monsters, yes, but utterly limp subplots
We know what the Doctor does, stop going on about it already
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
10 Top Tips For PRs Considering Whether To Phone The Register
You'll Read These And LOL Even Though They're Serious
Stop ROBOT exploitation, cry striking Foxconn workers
HP downturn and automation eroding overtime on China's production lines
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.