Alibaba, the e-commerce giant of China is beginning to feel the heat as the economy of the country is traveling on a bumpy road. In fact, the e-commerce company had to reduce the estimate of the revenue expansion for the present economic year by 5% due to the feeble pace of the economic state of the country as well as the ongoing trade war with the US.
For the present quarter, the e-commerce company has earned 54% more revenue than the previous year. However, the analysts expected the company to earn more than $12.4 billion, the earning for the quarter, ended in September.
The Chief Executive of Alibaba, Daniel Zhang stated that the global economy is not is a stable condition and the growing tensions of the US-China trade war are fuelling the same at an exponential rate.
Maggie Wu, the Chief Financial Officer of the company also stated that the decision to deplete the sales expectations was taken in the previous month as the economic status of the company was witnessed going downhill. In fact, the merchants are also facing tough times, which contributed to the decision.
China was proud of being the owner of the second-largest economy in the world after the United States. However, the country is witnessing a steep downfall in the status as the trade war is taking a toll. Also, the depleted value of the sales outlook of Alibaba clearly states that the grave condition of the economy, which is depleting with every passing day.
In the latest quarter, the growth of the economic output was reported to be 6.5% in comparison to the previous year, which is the lowest number of the past decade. This clearly depicts that the various other parts of the economy are getting affected along with the growing middle class.