Investors are concerned about Alibaba’s growth prospects

Jack Ma’s $3 billion gain has yet to be recovered.

Billionaire Jack Ma Investors has returned to square one. Since the beginning of the year, the $3.4 billion increase in his wealth has all but vanished, as Alibaba’s stock has been dragged lower on renewed concerns about the company’s growth prospects.

The globetrotter Ma, who step down as CEO of Alibaba in 2019 but continues to profit from his stake in the e-commerce behemoth, is now estimate to be worth $23.6 billion. His fortune has fallen by $3.1 billion since the company’s stock peaked at HK$122 per share in January. China’s long-await reopening from Covid lockdowns also regulatory approval of Ant Group’s funding plan boosted investor sentiment.

However, optimism is fading as the pace of recovery in Chinese consumer demand has been slower than expected. “Although factories have resumed production also people have returned to work. There is still a lack of desire to purchase goods such as apparel and beauty products,” says Shawn Yang. Managing director at Shenzhen-based research firm Blue Lotus Capital Advisors.

This, combined with fears of potential margin erosion due to a new price war brewing in the e-commerce sector, is weighing on sentiment.

According to the earnings release, growth was primarily drive by sales from the company’s international units, which increase by 18% yearly. Its core China commerce business, which includes Taobao and Tmall shopping sites, actually fell by 1%.

“There should be a recover in China’s e-commerce market later this year. That doesn’t necessarily mean Alibaba will have a very strong rebound,” say Ke Yan, head of research at Singapore-based DZT Research. “Its competitors, including Pinduoduo, Douyin, and Kuaishou, are all vying for market share.”

The once-exciting cloud computing division, Alibaba Cloud Intelligence, is also losing its lustre. The unit’s revenue increased by only 3% to $2.9 billion, compared to a whopping 50% increase just two years ago.