Dive Brief:
- Alibaba Group reported Thursday a 40% revenue increase in its December quarter, a showing that missed analysts' expectations.
- Revenue for the company's last quarter in 2014 was $4.22 billion, below the average estimate of $4.45 billion.
- The earnings come a day after Chinese agency the State Administration for Industry and Commerce (SAIC) released a report criticizing Alibaba for failing to address illegal business deals on its e-commerce websites, which include Taobao Marketplace and Tmall.com.
Dive Insight:
The release of Alibaba's missed earnings just a day after the release of this report is bad luck for the company. And while the two separate pieces of news may not be completely tied to each other, Alibaba has faced pressure for some time to clean up shady grey market deals that happen on its websites.
If Alibaba looks to expand, perhaps even to the U.S. one day, it needs to address these accusations to maintain a credibility necessary to enter potential new markets.