Chinese e-commerce giant Alibaba reported flat revenue growth on Thursday for the first time ever, as the country grappled with an economic slowdown and Covid-19 resurgences kept consumers jittery.
Revenue came in at 205.6 billion yuan (30.7 billion dollars) in the April-June quarter, beating analyst expectations despite being slightly below the same period last year, following a decline in the company's China commerce segment revenue, Alibaba said.
Alibaba's performance is widely seen as a gauge of Chinese consumer sentiment, given its market dominance, and its revenue growth has slowed markedly over the past year.
The company has been grappling with growing competition and economic fallout from strict Covid restrictions that have battered consumer sentiment, pushed the unemployment rate up and tangled supply chains.
“Following a relatively slow April and May, we saw signs of recovery across our businesses in June,” said Alibaba Group's chairman and chief executive Daniel Zhang in a statement.
The company's revenue growth was flat “primarily due to a decline in China commerce segment revenue” although this was offset by growth in the cloud segment, Alibaba added.
Many parts of China have faced harsh lockdowns in recent months, as officials struggled to stamp out the Omicron variant under the country's zero-Covid policy.
Shanghai, China's biggest city and a major economic hub, was sealed off for two months due to the Covid-related restrictions.
The firm cited “restrictions that resulted in supply chain and logistics disruptions in April and most of May” that bogged down performance in its China commerce sector, although there was a pick-up in demand in June during a popular shopping festival.
Its profit for the latest quarter stood at 22.8 billion yuan, down from 45.1 billion yuan a year earlier.
Apart from coronavirus curbs, Alibaba has also been contending with a regulatory crackdown on China's tech giants.
In recent years, officials took aim at alleged anti-competitive practices by some of China's biggest names, driven by fears that major internet firms control too much data and expand too quickly.
This included a last-minute cancellation of a planned IPO by Alibaba's financial arm Ant Group, which would have been the world's largest public offering at the time.
The tech behemoth saw its market value plummet after Beijing launched its sweeping crackdown in 2020.
But following the latest results, Alibaba's US-listed shares rose 4.5 percent in pre-market trading.
China's economy expanded just 0.4 percent in the second quarter this year, logging its slowest growth since the initial coronavirus outbreak more than two years ago. (AFP)