China's revenue meets expectations as slowdown set to continue

August 10, 2016 6:29 AM EDT

A sign of China's e-commerce company is seen at CES (Consumer Electronics Show) Asia 2016 in Shanghai, China, May 12, 2016. REUTERS/Aly Song/File Photo -

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By Paul Carsten

BEIJING (Reuters) - Inc, China's second biggest e-commerce company, reported revenue for the second quarter of 2016 that was within company forecasts, even as the growth rate continued a steady decline that is expected to continue.

The company, Alibaba Group Holding Ltd's main rival in online shopping, said on Wednesday revenue for the quarter rose 42 percent to 65.2 billion yuan ($9.83 billion), within's forecast range of 64.2-66.2 billion yuan.

But the company is predicting an even sharper decline in growth for the third quarter, compounding concerns that China's e-commerce sector is saturating.'s revenue from Amazon-like online direct sales rose 40 percent in the quarter, versus a 67 percent jump in sales from services and other now expects revenues for the third quarter to be 59-61 billion yuan, a rise of 34-38 percent from the same quarter in 2015.

Net losses were 132.1 million yuan ($19.92 million), compared to a loss of 510.4 million yuan in the previous year. The total value of merchandise transactions on's platforms was 108.7 billion yuan in the quarter, up 47 percent excluding online marketplace, which shut down.

Including Paipai's previous contribution to transactions for the previous year in the comparison, the second quarter's growth rate for value of merchandise sold would be 40 percent, according to Reuters calculations.

The company also gave an update on its share repurchase program it authorized in September, saying it had purchased 2.4 million ADSs for about $51.5 million. It has also entered into a structured repurchase agreement to lower the cost of acquiring shares. ( shares were up around 3 percent at $23.10 in pre-market trading in New York, but well below the $29.53 price at the beginning of the year.

(Reporting by Paul Carsten; Editing by Muralikumar Anantharaman and Louise Heavens)

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