Alibaba Group (NYSE:BABA) shares slumped more than 10% on Hong Kong overnight after chief executive Daniel Zhang warned about increased competition and a decline in consumer consumption in China.
It is another twist in the story of a company that for westerners remains shrouded in mystery despite its huge global presence.
Founded in 1999, Alibaba is a multinational technology company, with a substantial presence in e-commerce, retail, and technology.
Although most of its business takes place within the Chinese market, it is global, claiming to have 265mln overseas consumers at end June 2021.
It also boasts nearly a one billion customers within China and aims to double its global number to 2bn by 2036.
Possessing a market cap of nearly US$400bn, one of its biggest subsidiaries is Aliexpress, the online retail arm of the organisation that has been built on cheap prices.
In comparison, Amazon, which has similarities to Alibaba in some of its services, has a market cap of US$1.7tln, nearly three times bigger than its Chinese counterpart.
Jack Ma’s position in the company is another grey area.
The Chinese entrepreneur relinquished control of the company under a cloud of mystery in 2019, with Japanese tech investor SoftBank Group becoming the company’s largest current shareholder owning 25%.
Ma was reported missing at the end of November 2020 following criticism of the government and its handling of digital finance and companies in the state.
He did, however, resurface in January this year but where he stands at Alibaba is still not clear.
In its trading update yesterday, Alibaba reported that revenue grew by 29% in the three months to September 30 to US$31.4bn or its slowest rate of growth in 18 months.
Guidance going forward, annual revenue is expected to grow anywhere between 20% and 23%, compared to the 30% forecast by analysts in May.
Alibaba has been under intense scrutiny from the Chinese government, with tougher rules being imposed on big technology companies.
Earlier this year, China imposed a US$2.8bn fine on the e-commerce company after it deemed it had abused its market position.
Increasing caution from the Chinese public hasn’t help, with new coronavirus outbreaks, power shortages and concerns about the property market directly impacting Alibaba’s performance.
The company's shares have lost more than a third of their value so far this year, starting at US$29.77 and currently trading at US$17.87.