Alibaba's cloud growth hits slowdown after loss of top customer
Alibaba posted a rare operating loss in its March quarter following a 7.66 billion yuan fine levied by Chinese regulators related to the government's anti-monopoly law. Alibaba was hit with the antitrust probe back in January, with regulators looking into allegations of monopolistic behavior, including "forced exclusivity" demands imposed on merchants.
Outside of the fine, Alibaba's results were mixed, with the company reporting slower growth in its cloud business following the loss of a top customer in the Internet industry. The Chinese e-commerce giant said cloud computing revenues climbed 37% to $2.58 billion.
Alibaba didn't disclose the name of the customer, but said it has a sizable presence outside of China and had been using Alibaba's overseas cloud services in the past. The customer "has decided to terminate the relationship with respect to their international business due to non-product related requirements," Alibaba said.
Looking at the rest of the numbers, Alibaba said non-GAAP earnings for the quarter ending in March came to $1.58 per share on revenue of $28.6 billion, up 64% year-over-year. Analysts were expecting earnings of $1.79 per share on revenue of $27.8 billion.
Apart from cloud, the bulk Alibaba's revenue came from its commerce units, comprised of its retail and wholesale e-commerce and logistics businesses. The core commerce segment achieved revenue growth of 72% for the quarter to reach $25 billion. The company also saw 101% year-on-year growth in its logistics business Cainiao.
Alibaba said it added 23 million mobile active consumers to its retail marketplaces over the previous quarter to hit 925 million, while annual active users reached 811 million, up 32 million from the previous quarter. For the year, the company's annual active customer base for the whole Alibaba ecosystem surpassed 1 billion.
"Alibaba achieved a historic milestone of one billion annual active consumers globally in the fiscal year ended March 2021," said Daniel Zhang, chairman and CEO of Alibaba Group, in prepared remakrs. "Our overall business delivered strong growth on a healthy foundation, with the Alibaba Ecosystem generating a record US$1.2 trillion in GMV during this fiscal year. Such achievements were built on top of clear value propositions that we offer to consumers and merchants. We remain very excited about the growth of China's consumption economy, which is benefiting from the acceleration of digitalization in all aspects of life and work."