Chinese e-commerce giant Alibaba’s US-listed shares dropped over 10% after the company slashed its sales forecasts sharply, citing sluggish growth in Chinese consumer spending, reports the Financial Times. In quarterly results on Thursday, Alibaba said it now predicts 20-23% sales growth in 2022 compared to an earlier projection of 30% after experiencing “softer market conditions.”
Recent Chinese economic data have painted a gloomier picture of the country’s growth prospects. Retail sales rose just 2.5% year on year in August, far below economists’ forecasts of a 7% increase and it is the slowest rise in 12 months.
Alibaba is also grappling with tougher competition from established rivals such as Pinduoduo and JD.com as well as newer upstarts, all of which are trying to steal market share. Maggie Wu, Alibaba’s chief financial officer, said competitors were “increasing investment to acquire users and show a high level of spending.”