Alibaba Group Holding reported flat quarterly revenue growth for the first time since its 2014 New York listing as China’s largest e-commerce company faced a number of challenges including a resurgence of Covid in China that led to major cities being locked down.

Alibaba booked a revenue of 205.56 billion yuan (roughly $31billion) for the second quarter, down 1 percent from the same period of last year.

Net income fell 50 per cent year-on-year to 22.74 billion yuan (US$3.4 billion), but the number beat average analysts’ estimate.

Daniel Zhang Yong, chairman and chief executive of Alibaba, said gross merchandise volumes (GMVs) – a measure of transactions of goods – on Taobao and Tmall experienced a “mid-single-digit percentage decline year-on-year”.

He also added Alibaba could not control the Covid resurgence nor Beijing’s policies.

In an earnings call, Daniel Zhang said the company saw signs of a business recovery in July, but emphasized that the following months would be a period of "cost-cutting and efficiency."

“The only thing we can do at this moment is focus on improving ourselves.”

During the June quarter, Revenue from Alibaba’s biggest revenue generator, the China commerce division which consist of its popular marketplace Taobao, Tmall, declined 1% year on year to 141.93 billion yuan. That was mainly driven by a 10% decrease in customer management revenue

International commerce business rose 2 per cent to 15.45 billion yuan, which account for 7 per cent of the total revenue.

In June, Alibaba said it saw a recovery in gross merchandise volume (GMV) thanks to improving logistics and the annual 6.18 shopping festival in China, which fall on June 18 every year. GMV is a measure of the sales transacted across Alibaba’s platforms but does not directly equate to revenue.

Cloud computing revenue, its main growth driver beside e-commerce, rose 10 percent to 17.69 billion yuan. the fastest growth among all of the company’s business segments, accounting for per cent of the total revenue

Local consumer services – which includes location-based services such as on-demand delivery platform Ele.me, maps app Amap and online travel service Fliggy – rose 5 per cent to 10.63 billion yuan.

The declining growth had also been shown in the earning reports of other Big Tech firms in China. Tencent Holdings also reported flat revenue growth for the first quarter, with profits dropping by more than half from a year earlier. The company is due to report its second quarter results on August 17.

Meanwhile, Alibaba is also facing challenges on another front. Last week, Alibaba last month was also identified by the US Securities and Exchange Commission as one of the many Chinese companies for possible removal from US stock exchanges, days after the e-commerce giant announced plans to seek a primary listing on Hong Kong’s bourse