Alibaba reported an increase in sales but a fall in income as annual active consumers across the world reached over 1 billion for the first time.

Revenue across the Chinese retail group’s vast ecosystem increased by 34% to reach RMB205.7bn ($31.87bn) in its first quarter of the year (the quarter to the end of June). This was below the average market estimate of RMB209bn, according to a survey of analysts by Refinitiv.

Operating income dropped by 11% to RMB30.8bn ($4.8bn) in the 12 weeks to June 30 2021, while EBITDA also dipped, by 5% to RMB48.6bn ($7.5bn). The tech titan blamed the decreases on increased strategic investments and merchant support. 

Alibaba’s quarterly update follows a crackdown by Chinese regulators on private tech companies. In April, the country’s anti-monopoly regulator left Alibaba with its first loss in nine years after it was forced to pay a $2.8bn fine after probes alleged that it had abused its market position. Net income attributable to ordinary shareholders fell 5% to RMB45.1bn ($6.9bn).

In July, Alibaba faced further fines by the State Administration for Market Regulation for acquiring stakes in companies that could subsequently increase its market share.

Alibaba’s worldwide customer base recorded steady gains for the 12 months ended June 30 2021, reaching 1.18 billion users for the first time. This also marked an increase of 45 million on the number reported at the end of the previous quarter; 912 million of these consumers were based in China.

Alibaba indicated that value for money continued to drive sales as annual active consumers of the group’s value arm Taobao Deals grew to over 190 million. The company also revealed an increase in interest in sustainable shopping, with 100 million active monthly users on the Chinese second-hand marketplace Idle Fish.

Alibaba continues to develop delivery services to match consumer demand, including one-hour and half-day delivery.

Chief financial officer Maggie Wu also announced the company’s intention to increase its share repurchase programme from $10bn to $15bn due to its confidence in “long-term growth prospects”.

Chief executive Daniel Zhang said: “Alibaba started the new fiscal year by delivering a healthy quarter. For the June quarter, global annual active consumers across the Alibaba ecosystem reached 1.18 billion, an increase of 45 million from the March quarter, which includes 912 million consumers in China. Over more than 20 years of growth, we have developed a company that spans across both consumer and industrial internet, with multiple engines driving our long-term growth.” 

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