Alibaba, China's e-commerce giant, is beginning to feel the heat of the country's economy traveling down a bumpy road. In fact, the e-commerce company had to reduce the estimate of revenue growth for the current fiscal year by 5% due to the weak economic state of the country as well as the ongoing trade war with the US.
For the current quarter, the e-commerce company had revenues 54% higher than the previous year. However, analysts had expected the company to earn more than $ 12.4 billion, quarter-to-quarter revenue, which ended in September.
Alibaba Chief Executive Daniel Zhang said the global economy is not a stable condition and the growing tensions of the US-China trade war are fueling the same at an exponential rate.
Maggie Wu, the company's chief financial officer, also said the decision to deplete sales expectations was made the previous month when the company's economic situation was seen falling. In fact, traders also face tough times, which contributed to the decision.
China was proud to own the second largest economy in the world after the United States. However, the country is witnessing a sharp drop in the status of the trade war. In addition, the exhausted value of Alibaba's sales prospects clearly states that the serious condition of the economy, which is running out every day.
In the last quarter, economic output growth was 6.5% compared to the previous year, which is the lowest in the last decade. This clearly shows that the various other parts of the economy are being affected along with the growing middle class.