(Reuters) – Alibaba reported on Friday of a turnover lower than expectations in the first quarter of its tax fiscal year, the online trade activity of the Chinese group having suffered from strong competition and a hesitant demand from consumers, eclipses the gains of its “cloud computing” division.

The action listed in the United States of the group increased by 2% in the trade-offs.

Consumer confidence in China has been shaken by an economy weighed down by the persistent crisis in the real estate sector, the weakness of wage growth and the disturbances of world trade.

Consumers have remained cautious, even if online business platforms have multiplied the prices and price reductions to stimulate demand.

This prudence overshadowed the strong growth of Alibaba’s cloud segment, whose turnover jumped from 26% to 33.40 billion yuan (3.98 billion euros), against an increase of 18% in the previous quarter.

Analysts were tabling on an increase of 18.4% to 31.44 billion yuan, according to LSEG data.

Alibaba has established itself as one of the most offensive players in the AI ​​sector in China, revealing new improvements almost every week, the latest being a model capable of transforming portrait photos into realistic video avatars.

“AI -related income now represents a significant share of turnover from external customers,” said Alibaba Group director, Eddie Wu.

The group declared a total turnover of 247.65 billion yuan in the first quarter ended at the end of June, against 252.92 billion expected in the LSEG consensus.

Alibaba’s operating profit has fell 3% over a year and its adjusted operating profit before interest, taxes and depreciation (EBITA) fell 14%, largely due to investments in instant trade activity.

(Written by Deborah Sophia in Bangalore and Casey Hall in Shanghai; Noémie Naudin, edited by Augustin Turpin)

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