Alibaba stock declined as much as 6.25% to $72.53 per share today following the Chinese online retailer’s latest earnings report. Along with that report, the company also announced a deal with Macy’s to set up a virtual storefront on its Tmall online property.
Additionally, there was a report this morning that Alibaba intends to collaborate with Tencent to invest in an internet TV startup.
Alibaba signs exclusive agreement with Macy’s
This morning Alibaba announced that Macy’s will become the first department store in the U.S. to join Tmall Global through a joint venture. The exclusive agreement is between Macy’s China Limited and Hong Kong-based Fung Retailing Limited, one of Greater China’s top retailers.
Under the terms of that agreement Macy’s will set up an exclusive online flagship store on Tmall Global later this year. Tmall is Alibaba’s third-party platform which allows brands and retailers to set up virtual storefronts on its platform.
“Millions of Chinese tourists have come to know and love Macy’s when they travel to New York, San Francisco, Chicago and other American destinations,” Macy’s Chairman and CEO Terry Lundgren said in a statement. “By making Macy’s accessible in China through Alibaba’s Tmall Global, we have an opportunity to deepen our relationship with international customers and to grow sales.”
Shares of Macy’s declined as much as 4.52% to $64.48 per share today in afternoon trading.
Alibaba said to partner with Tencent
Also today, Wei Gu of The Wall Street Journal reports that in a rare partnership with competitor Tencent, Alibaba is investing in an internet TV startup from China Media Capital. The report cites unnamed sources for the information. The startup is called Whaley Technology, and China Media Capital founded it earlier this year. Whaley plans to unveil its first product tomorrow.
Alibaba and Tencent reportedly are planning to put capital, content and technology into Whaley’s product. Together, the two Chinese companies are said to be investing hundreds of millions of dollars into the startup. Whaley’s TV sets will measure 55 inches and go on sale in two weeks on the company’s own website and also on Tmall before being made available on other online sales platforms.
Alibaba’s sales disappoint
Alibaba has been venturing into more and more areas of technology with investments being made in a variety of companies and products. The online retailer has also been announcing partnership after partnership with major global brands to set up storefronts on its platforms.
The company posted non-GAAP earnings of 59 cents per share, coming out slightly ahead of the consensus estimate of 58 cents, on revenue of $3.265 billion, which misted the estimate of $3.39 billion. The company’s gross merchandise volume grew 34% year over year despite taking a hit from the suspension of online lottery sales. Alibaba provided ValueWalk with this infographic highlighting key numbers from this morning’s earnings report.