It reported sales of 208.2 billion yuan for the March quarter, versus an average analyst estimate for 209.2 billion yuan. Net income was 23.5 billion yuan, reversing losses a year ago thanks to once-off gains.

(May 18): Alibaba Group Holding Ltd will begin exploring initial public offerings for its logistics and grocery arms, kicking off a long-awaited breakup that may help reverse anemic growth at China’s cloud and online commerce leader.

Alibaba on Thursday (May 18) again posted single-digit revenue growth, reinforcing concerns that a Chinese consumer spending rebound may be farther out than anticipated. It also announced formal approval to spin off its cloud services division by distributing stock to shareholders, and to explore IPOs for its Cainiao logistics arm and Freshippo grocery chain. The company also plans to secure external financing for its international commerce division, which encompasses overseas operations such as Singapore-based Lazada.

As China’s largest e-commerce company, Alibaba remains a barometer for consumer demand in the country. Its domestic commerce shrank 3%, while the cloud division, the other closely watched business, was down 2%. That lackluster showing underscores how China may be recovering from years of Covid Zero restrictions at a slower pace than projected, hampered by US sanctions on China and an uncertain global economic environment. Hopes that Beijing would support private enterprise this year after a blistering crackdown on the internet sector haven’t translated into meaningful policy so far.

It reported sales of 208.2 billion yuan (RM134.3 billion) for the March quarter, versus an average analyst estimate for 209.2 billion yuan . Net income was 23.5 billion yuan, reversing losses a year ago thanks to once-off gains. Alibaba’s stock stood largely unchanged in pre-market New York trading.

Investors had bet that consumer spending and the tech sector would rebound after Beijing lifted years of sweeping restrictions that hobbled the world’s No 2 economy. But economists point to slowing trade and other signs the nascent recovery is losing steam. During the recent Golden Week holiday, an important indicator of broader sentiment, overall spending lagged behind booking volumes.

Beyond fundamental trends, some investors harbour hopes that the spinoffs might galvanize the market, enable the different operations to move more nimbly and fuel a share rebound. In March, Alibaba made the historic decision to split itself into six units covering its main businesses from cloud services to international commerce and logistics. Each unit, except for the core Taobao Tmall Commerce Group, can seek fundraising and listings.

Despite overall malaise, there’re hints online commerce is at least rounding a corner.

Gross merchandise value growth in China’s e-commerce industry accelerated to 11% in March after slowing to 5% in the first two months of 2023, according to estimates by Goldman Sachs Group Inc., which cited recovering demand and easing logistics disruptions. Last week, JD.com Inc said volume growth this quarter was outpacing the previous three months, helping prop up its stock.

Tencent Holdings Ltd grew revenue at its fastest pace since 2021, while Baidu Inc also posted sales beyond estimates. Both credited a recovery in segments of domestic consumption. Michael Burry, the money manager made famous in The Big Short, boosted his bullish bets on JD and Alibaba even as other hedge funds cooled on the nation’s reopening trades.

That bottom-line focus is taking on urgency because of fierce competition in its home market from JD, PDD Holdings Inc and up-and-comers such as ByteDance Ltd, which have stepped efforts to lure customers and woo merchants.

Overseas, the tech giant is curtailing its global ambitions. Alibaba sold off the last of its shares in Indian fintech giant Paytm this month, accelerating a withdrawal from the world’s fastest-growing mobile and internet arena.