Alibaba reported lower-than-expected sales for the first quarter of its fiscal year on Friday, as the Chinese group’s online commerce business continued to struggle with stiff competition and subdued consumer demand — overshadowing gains from its growing cloud computing division.

The group's U.S.-listed shares rose 2% in pre-market trading.

Consumer confidence in China remains fragile, as the ongoing real estate crisis, sluggish wage growth, and disruptions to global trade impact it.

Shoppers stayed cautious, even as e-commerce platforms launched heavy discounts and price cuts to stimulate spending.

This caution muted the impact of a strong performance in Alibaba's cloud segment, where sales rose 26% to 33.40 billion yuan (€3.98 billion), up from 18% growth in the previous quarter.

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