HONG KONG (BLOOMBERG) - Alibaba Group Holding's revenue grew at its slowest pace on record for a September quarter, underscoring how the e-commerce giant's post-pandemic rebound is starting to plateau.

Asia's largest corporation reported a 30 per cent rise in sales in the September quarter, in line with expectations but down a tad from the previous three months. That did little to reassure investors worried about the tightening regulatory scrutiny that forced Jack Ma's Ant Group to call off its US$37 billion (S$50 billion) IPO. Chief executive officer Daniel Zhang would only say it's evaluating the impact on its business from more stringent rules governing its 32 per cent-owned sister company.

Alibaba's shares sank as much as 4.3 per cent in early Hong Kong trading on Friday (Nov 6), extending a volatile streak that began with a sell-off of more than US$60 billion earlier this week. The company enjoys a close relationship with Ant, whose Alipay mobile wallet anchors the majority of Alibaba's e-commerce transactions and whose microlending services drive consumption. In response to a question about the extent to which Ant loans lead to online shopping, executives said the company doesn't quantify that traffic.

"As Ant Group's major shareholder, Alibaba is actively evaluating the impact on our business in response to the recently proposed changes in the fintech regulatory environment, and will take appropriate measures accordingly," Zhang told analysts on a conference call.

Alibaba booked almost 4.7 billion yuan (S$956.8 million) of profit from Ant in the September quarter, a big chunk of its overall bottom line. The e-commerce giant reported revenue for the three months ended September of 155.1 billion yuan, meeting the 154.8 billion yuan average of estimates. Profit fell 60 per cent to 28.8 billion yuan from a year earlier, when it booked a one-time gain from the acquisition of its stake in Ant.

Alibaba had benefited from stronger sales in its home market, which had led the global recovery from Covid-19. Gross domestic product grew 4.9 per cent last quarter, making China the world's only major growth engine. The e-commerce titan is banking on more than a quarter of a million brands, increased discounting and technologies like livestreamed selling to draw consumers to its annual blockbuster Single's Day shopping festival, which culminates next week.

"The performance of Singles Day might be a more important benchmark to look at, rather than the third quarter result," said Steven Zhu, an analyst with Pacific Epoch. "E-commerce is the only sector that will actually benefit from coronavirus, simply due to the fact that a lot of normal consumption is shifted from offline to online."

Alibaba's shares have gained more than 60 per cent from their Covid-19-era lows in March and touched a record high in October when Ant priced its IPO. Retail and institutional investors had flocked to the record US$35 billion-plus IPO, betting that Ant will overcome high valuations, regulatory headwinds and rising competition to reshape the future of global finance.

Excluding the Covid-hit March quarter, the 29 per cent increase in Alibaba's core commerce business was the slowest in more than five years as consumers put off purchases ahead of Single's Day. The closely watched customer management revenue for China commerce rose 20 per cent in the quarter. Core commerce should expand at a compound annual growth rate of 23 per cent from 2021 to 2023, CGS-CIMB analysts wrote.

Revenue for Alibaba's cloud division jumped 60 per cent in the quarter, driven by demand from customers in the Internet, finance and retail industries. The unit is forecast to turn profitable for the first time ever in the year ending March, a target that was reiterated by chief financial officer Maggie Wu on Thursday. That will be a milestone for the decade-old business, which competes with the likes of Amazon Web Services, Microsoft and Google globally and is fending off upstarts like Tencent Holdings at home.

Alibaba is keeping up a steady pace of acquisitions to drive growth. The company teamed up with Richemont to jointly invest US$1.1 billion in luxury e-commerce retailer Farfetch Ltd. to tap the burgeoning demand for high-end foreign goods among China's middle class, according to a statement on Thursday. President Xi Jinping said on Wednesday the country may import more than US$22 trillion worth of products over the next decade.

In October, Alibaba also agreed to take a stake in Swiss duty-free giant Dufry, a move that Zhang said would be a "very important step" in helping the company grow its retail travel business as China develops domestic free trade ports. And to capitalise on the boom in online groceries, it last month paid about US$3.6 billion to double its stake in Sun Art Retail Group, taking control of one of China's largest hypermarts to try and fend off rivals like JD.com, upstart Pinduoduo and Tencent-backed Meituan.