By Yuvraj Malik and Casey Hall
(Reuters) – China’s Alibaba Group Holding reported first-quarter revenue on Thursday that beat analysts’ estimates as consumer sentiment improved from the same time a year earlier when there were strict pandemic-related lockdowns.
Alibaba posted revenue of 234.16 billion yuan ($32.29 billion) in the quarter, compared with analysts’ estimates of 224.92 billion yuan, according to Refinitiv data.
The company’s U.S.-listed shares rose nearly 4% in pre-market trading.
The latest revenue figure represents an improvement from flat to 3% growth in the past four quarters.
However, the earnings come at a time when fears have grown about China’s economy, which has faltered after an initially brisk recovery from the lockdowns. On Wednesday, China reported it tipped into deflation in July at the consumer price level – a development expected to further weigh on shoppers’ will to spend.
Revenue in the first quarter to end-June was helped by a recovery in consumer purchases on Alibaba’s Taobao and Tmall marketplaces, boosted in part by the 618 shopping festival, China’s second-largest online shopping event, in June.
Customer management revenue, which tracks how much merchants spend on Alibaba, rose 10% to 79.7 billion yuan, thanks to an increase in merchants’ willingness to invest in advertising and higher sales during the festival.
This was the last earnings announcement under Alibaba CEO and Chairman Daniel Zhang, who will step down from the roles in September to focus on leading its cloud division.
The CEO role will be handed over to Eddie Yongming Wu, chairman of Alibaba’s Taobao and Tmall Group, while Executive Vice Chairman Joseph Tsai will take over as chairman.
Regulatory concern has eased for China’s tech giants, including Alibaba, this year, with Chinese authorities keen to boost private sector confidence. But China’s sputtering economy and mounting competitive pressure from smaller rivals such as PDD Holdings and Douyin, the Chinese version of TikTok, pose major challenges to Alibaba.
(1 Chinese yuan renminbi = $0.1387)
(Reporting by Yuvraj Malik in Bengaluru; Editing by Shounak Dasgupta and Sharon Singleton)
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