Alibaba shares fall after disappointing business results

The Hong Kong stock of Alibaba (NYSE: BABA) Group Holding Ltd. (HK: 9988) dropped after the Chinese e-commerce giant lowered its outlook for fiscal 2022.

Shares fell 10.13% to HK$140.20 ($18) by 9:46 PM ET (2:46 AM GMT).

Alibaba reported a 29% less-than-expected increase in revenue for the September quarter to CNY 200.7 billion ($31.44 billion). The company forecasts fiscal 2022 revenue to grow between 20% and 23%, lower than the 27% growth widely expected. Net income also fell 81% to CNY 5.4 billion, also falling short of estimates after Alibaba reduced the value of its stock investments.

The company will share more details about its outlook at an annual investor forum starting December 16, Alibaba CEO Daniel Zhang said.

Weaker consumer spending and increased competition have contributed to the downgrade. The slowdown is likely to continue into the December quarter, including the Singles Day shopping festival. Alibaba recorded $84.5 billion in revenue for the event last week, which is a record but a sharp drop from previous years.

Competitors like JD (NASDAQ: JD). Com Inc. (HK: 9618) and Pinduoduo (NASDAQ: PDD) Inc. competition is also increasing. Pinduoduo's annual number of active shoppers reached 849.9 million in the 12 months to June 2021, surpassing Alibaba's figure. JD.com is also attracting new brands like Starbucks (NASDAQ:SBUX) and Estee Lauder (NYSE:EL) to its platform.

The latest COVID-19 outbreak in the country is also dampening consumer sentiment. Going forward, we will continue to invest heavily in the three growth engines of domestic consumption, globalization, cloud computing and data intelligence," said Zhang.