Alibaba Group Holding Ltd Expects Online Sales to be Lower than Expected
Chinese e-commerce giant, Alibaba Group Holding Ltd said, it expects lower e-commerce transactions in the quarter which ends in September than what it had forecasted earlier owing mainly to the slowing growth of the Chinese economy.
On Tuesday, at a conference in New York, the Chinese e-commerce company's Jane Penner who is the investor relations head said that Alibaba is "observing some negative impact to the magnitude of the spending" by the consumers in China on their online platforms.
Ms. Penner added, "We think this is more due to psychology than an ability to spend. We're still actually seeing high engagement by buyers on our platforms."
However, the company predicts its overall transaction value which is a carefully watched measure called "gross merchandise value" will be in "mid-single-digits" which is lower than the company's initial expectations.
Ms. Penner said that the company thinks it will have an effect on the quarter ending in September.
On Tuesday, Alibaba's U.S traded shares droped 4.7% to $60.91.
China's economy has grown at its slowest pace in the last twenty five years at only seven percent in the first half of this year when compared to the year prior. The economic data of August suggest a slowdown in the economic growth in the second half of the year.
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