JD.com Declines as Alibaba Sales Growth Disappoints

Chinese e-commerce operators slumped in U.S. trading after Alibaba Group Holding Ltd. posted quarterly sales that trailed analysts’ estimates, sparking concern that an industry shift toward mobile devices will crimp revenue growth.

JD.com Inc, China’s second-largest online retailer after Alibaba, dropped 5 percent in New York from a two-month high. Vipshop Holdings Ltd., which sells discounted brand-name fashion goods, sank 4.3 percent, while E-Commerce China Dangdang Inc. fell for a third day. The Bloomberg China-US Equity Index gained 0.3 percent.

Alibaba’s sales growth last quarter was restrained as ads sold for placement on the smaller screens of cell phones and tablets generated less money than those for desktops, according to China’s biggest e-commerce operator’s earnings report. Online retailers investing in mobile apps to lure China’s 527 million smartphone and tablet users are competing in a market where profit will be harder to make, according to Henry Guo of JG Capital Corp.

“Alibaba’s disappointing revenue may cause concerns among investors about slower growth in online consumption,” Guo, a senior analyst at JG Capital in San Francisco, said by phone. “Other e-commerce companies may face the same challenges as they shift to mobile. They invest to win users on their mobile applications while at the same time they may have to lower charges for advertisers or sellers.”

Alibaba’s revenue grew 40 percent to 26.2 billion yuan ($4.2 billion) in the third quarter ended in December, falling short of the 27.6 billion-yuan average of 25 analyst estimates. Net income fell 28 percent to 5.98 billion yuan as the company awarded 16 percent of sales to employees and its payment unit.

ETFs Advance

Beijing-based JD.com sank to $24.69, dropping the most since Dec. 1. Vipshop, based in Guangzhou, slid to $21.97, paring its gain this year to 12 percent. Dangdang slipped to $8.58, the lowest closing level since Dec. 16. Alibaba tumbled 8.8 percent to $89.81, the steepest decline since its U.S. debut in September.

The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the largest U.S. exchange-traded fund that tracks mainland Chinese stocks, added 0.9 percent to $35.74 after a two-day slump. The iShares China Large-Cap ETF, the largest Chinese ETF in the U.S. tracking Hong Kong shares, climbed 0.7 percent to $42.39, halting a four-day decline.