By Juro Osawa
Alibaba Group Holding Ltd. reported disappointing revenue growth
on Thursday, while a senior executive defended the e-commerce giant
against Chinese government allegations that it failed to crack down
on fakes.
Shares of the Chinese e-commerce giant fell about 6% to $92.58
in premarket trading as the company's revenue of $4.22 billion
missed analysts's average forecast of $4.45 billion. Through
Wednesday, the stock had risen 45% since its initial public
offering price of $68 in September.
Alibaba said the revenue growth from its China retail
marketplaces trailed the growth of total business volume.
The company's quarterly results came as Alibaba defends itself
against accusations from a powerful Chinese government regulator
made on Wednesday that it failed to crack down on the sale of fake
goods, bribery and other illegal activity on its platforms.
In a conference call on Thursday, Executive Vice Chairman Joseph
Tsai called the allegations "so unfair."
"We have been very vocal about protesting, and we're prepared to
file a complaint," he said. Mr. Tsai said Alibaba has spent more
than 1 billion yuan (about $160 million) for the past two years to
fight fakes and protect consumers.
The accusations came in the form of a white paper posted on
Wednesday on the website of the regulator, the State Administration
for Industry and Commerce, that was based on discussions between
Alibaba executives and government officials in July. He said
Alibaba didn't see the white paper prepared by the regulator until
it was posted. He said the July meeting was like its other normal
meetings with regulators.
The white paper said SAIC officials had delayed the report so
that it wouldn't affect Alibaba's September initial public offering
in the U.S., which raised $25 billion and was the world's
largest.
"I want to make it absolutely clear that Alibaba never requested
the SAIC to delay the publication of any report," Mr. Tsai
said.
On Thursday, the white paper disappeared from the SAIC's
website. An SAIC press representative said she didn't know the
reason.
For the December quarter, Alibaba's earnings fell 28% to $964
million, or 37 cents a share. The company attributed much of the
drop to $241 million in expenses related to share-based
compensation to employees. It also booked a $134 million charge
related to financing-related fees from early repayment of debt and
faced rising tax expense.
Excluding such items, per-share earnings rose 13% to 81 cents a
share. Analysts, on average, were expecting earnings of 75 cents a
share, according to Thomson Reuters.
Mobile transactions accounted for 42% of Alibaba's overall
transactions, up from 36% in the September quarter and 20% from a
year earlier. The number of active users on Alibaba's mobile
platforms rose to 265 million in December, up from 217 million in
September from 136 million a year ago.
Alibaba's ability to boost revenue from its mobile platforms has
been scrutinized as more Chinese Internet users go online from
their mobile devices.
Alibaba said that on its China retail marketplaces, gross
merchandise volume for the quarter increased 49% and annual active
buyers rose 45% year-over-year.
Earlier this week, Yahoo Inc. unveiled a plan to spin off
tax-free its nearly $40 billion of holdings in Alibaba. The spinoff
is seen giving the Chinese e-commerce giant the chance to buy its
own shares at a lower tax rate than if it tried to acquire them
now.
Alibaba said Thursday that it had $21.07 billion in cash as of
Dec. 31.
Write to Juro Osawa at juro.osawa@wsj.com