E-commerce website Alibaba.com (1688.HKG) said its first quarter net profit dropped 25% annually to US$54 million, the lowest since the first quarter of 2010, after a shift in its business model led to shrinking membership sales, Bloomberg reported. The company’s revenue increased 3.7% to US$253.1 million for the first three months. Slimmer profits were due in part to Alibaba.com’s move in February 2011 to impose higher membership standards for online suppliers, after some buyers were defrauded. The listed company also reported a year-on-year drop in membership revenue last quarter, while its investments in product development and upgrades increased operating expenses 8.2%. Parent company Alibaba Group, which owns 73% of Alibaba.com, said in February that it would offer US$2.5 billion to buy out Alibaba.com’s remaining listed shares to free it from the “pressure of market expectations.”
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