Market Overview

3 Factors That Affected Alibaba's Revenue Growth


Shares of Alibaba Group Holding Ltd (NYSE: BABA) collapsed on Wednesday on back of the Chinese retail giant reporting its slowest growth in the last three years.

Hany Nada, GGV Capital co-founder and an early investor in Alibaba, was on CNBC to discuss the factors that affected the company's growth in the quarter.

3 Factors

"I'm a long-term believer in Alibaba and what they're doing," Nada began. "I mean, venture capital by definition is a long-term game. The thing that I saw here were three factors that were affecting GMV growth or revenue growth, if you will. One was the mobile transition and I think they're doing a pretty good job at that, but there's still a gap between monetization of mobile versus desktop. The second is the Chinese economy which everybody has been talking about obviously."

Related Link: Alibaba CEO: Short-Term Movement Won't Affect Long-Term Strategy

He continued, "I think that has also had an impact, but is not as big as most people think. I think the third piece here which I think most people underestimate  is the cleanup that Alibaba has been doing of its merchants over the last year or so. Since it started kind of cleaning up the bad merchants and the bad sales that they have had. I think that's also had a big impact on the slowdown or the headwind, if you will, affecting GMV or revenue growth."

Playing A Long Game

Nada dismissed the assumption that the change of sentiments towards Alibaba is going to affect its future growth, saying, "The sentiment has shifted  dramatically since the company went public about a year ago. However, if you think about the game that Jack Ma and Joe and the team is playing, they're playing a long game."

"I think, international markets is going to be a very important market for them. I think they're patient, they're going to take their time, they're going to enter those markets correctly, I think."

Posted-In: CNBC GGV Capital Hany NadaMedia


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