China’s feels pressure as sales of big ticket items slow

  • Concerns of weakening growth momentum have pushed down shares by more than 44 per cent this year
PUBLISHED : Monday, 19 November, 2018, 8:50pm
UPDATED : Monday, 19 November, 2018, 9:26pm

Chinese e-commerce firm’s shares came under further pressure on Monday after the company reported its slowest quarterly revenue growth since its initial public offering in 2014., which is backed by Walmart, Alphabet’s Google and Tencent Holdings, has already lost nearly half of its market value this year as it fights intense competition for Chinese online consumers.

On Monday, it said slower sales in its core e-commerce business, particularly big ticket items, dented third-quarter earnings growth.

While revenue rose 25 per cent from the same period a year earlier, it lagged analysts’ forecasts and was well below previous growth rates, which peaked at over 60 per cent in 2015. billionaire founder Richard Liu a no-show at high-profile events in China as US rape accusation hangs

The company also forecast fourth quarter sales growth between 18 and 23 per cent, slightly below an average analyst estimate of 23.5 per cent.’s shares were down over 5 per cent in pre-market trade on Nasdaq.

Concerns over the trade war between China and the US as well as a rape case facing founder and chief executive Richard Liu Qiangdong have pushed down shares by more than 44 per cent this year. Shares of its bigger rival Alibaba Group Holding have shed 11 per cent.

Both firms are making efforts to reach new consumers in Southeast Asia and rural China as demand tapers off in big cities.

Earlier this month, Alibaba lowered its forecast for full-year sales, citing economic uncertainty linked to the trade war. Alibaba is the parent company of the South China Morning Post.’s technology and content costs for the third quarter were 3.4 billion yuan, almost doubling from a year earlier, reflecting a steep investment in research and development, including warehouse technology, offline retail and drones.

In August, the company said it will move its warehouse business into a separate unit, offering logistics management to third-party brands as well as its own platform, in a bid to boost income.

Experts say corporate governance risks exposed at after CEO Liu’s arrest on rape allegation said revenue totalled 104.8 billion yuan (US$15 billion) for the quarter ended September 30, missing an average estimate of 106.2 billion yuan from 22 analysts, according to IBES data from Refinitiv.’s volumes are seasonally lower in the third quarter as it ramps up to its November Singles’ Day promotion period. This year, it sold 158.9 billion yuan in goods during the annual event, up 17 per cent from a year earlier.

Despite the lower-than-expected sales, the company reported income of 0.80 yuan per share, above an estimate of 0.72 yuan, driven by stronger sales in its technology services unit, which grew at almost twice the rate of its general product sales. turns to Google, Walmart to build global e-commerce empire has recently been in news for the arrest of Liu over a rape accusation in the United States.

He was released after a night in jail in Minneapolis. has said the accusation against Liu was unsubstantiated.

Minneapolis police said on September 20 that an initial investigation into the rape allegation against Liu had been completed. The matter was handed to local prosecutors for possible charges.

The firm did not make any further comment on the issue in what is its first quarterly results since the arrest.