(Yicai Global) Nov. 19 -- Shares in Alibaba Group Holding plunged after the Chinese online retail giant posted an 87 percent drop in quarterly profit and scaled back its expectations for full-year revenue.

Alibaba [HKG: 9988] finished 10.7 percent lower in Hong Kong today at HKD139.30 (USD17.88). Its New York-listed stock [NYSE: BABA] slid 11.1 percent to USD143.60 yesterday.

Net profit was USD524 million in the fiscal second quarter ended Sept. 30, compared with USD4.2 billion a year ago, the Hangzhou-based firm’s earnings results showed yesterday. For the fiscal year through next March, Alibaba forecast sales to increase at the slowest rate since the firm listed on the stock market in 2014 due to competition and uncertainties in the macroeconomy.

“Economic headwinds coupled by intensifying market competition” are the main stumbling blocks, Chief Executive Daniel Zhang said on an earnings conference call.

Alibaba now expects an annual revenue gain of between 20 percent and 23 percent, compared with an earlier prediction for 29.5 percent growth.

The company is under pressure from rivals such as Pinduoduo and JD.Com as well as a tighter regulatory environment in China. Sporadic outbreaks of Covid-19 in the country have also served to dampen consumer spending.

Alibaba attributed the decline in quarterly profit to changes in the market prices of its equity investments in listed companies and bigger investment in areas such as Taobao deals, local consumer services, community marketplaces, and Southeast Asian e-commerce platform Lazada.

Quarterly revenue rose 29 percent from a year earlier to USD31.4 billion, falling a little short of market expectations, driven by growth in Alibaba’s commercial retail and cloud computing businesses.

Editor: Futura Costaglione