(Bloomberg) – Sales of Alibaba Group Holding Ltd. grew the slowest on record in a September quarter. This underscores that the e-commerce giant’s post-pandemic recovery is gradually reaching a plateau.

Asia’s largest company posted a 30% increase in revenue for the September quarter, in line with expectations, but down a little from the last three months. This did little to reassure investors, who worried about tightened government scrutiny that forced Jack Ma’s Ant Group Co. to abandon its $ 35 billion IPO. CEO Daniel Zhang would only say that he evaluates the impact of stricter rules for his 32% sister company on his business.

Alibaba’s shares fell as much as 4.3% in early Hong Kong trading, prolonging a volatile period that began earlier this week with a sell-off of more than $ 60 billion. The company has a strong relationship with Ant, whose Alipay mobile wallet anchors the majority of Alibaba’s e-commerce transactions and whose micro-credit services increase consumption. When asked about the extent to which ant credits lead to online purchases, executives responded that the company doesn’t quantify that traffic.

“As the major shareholder in Ant Group, Alibaba is actively evaluating the impact on our business in response to the recently proposed changes in the regulatory environment for fintech and will take appropriate action,” Zhang told analysts on a conference call.

Read more: As part of the chaotic decoding of Jack Ma’s $ 35 billion IPO

Alibaba posted nearly 4.7 billion yuan in profit from Ant in the September quarter, a large portion of its overall bottom line. The e-commerce giant reported revenue of 155.1 billion yuan ($ 23.4 billion) for the three months to September, an estimated average of 154.8 billion yuan. Earnings were down 60% year over year to 28.8 billion yuan when the company posted a one-time gain on the acquisition of its stake in Ant.

Alibaba had benefited from stronger sales in its home market, leading to a global recovery from Covid-19. The gross domestic product grew by 4.9% in the last quarter. This makes China the only major engine of growth in the world. The e-commerce titan is relying on more than a quarter of a million brands, increased discounts, and technology like livestream sales to draw consumers to its annual blockbuster shopping festival, Single’s Day, which culminates next week.

The story goes on

“Singles Day performance may be a more important metric than third quarter results,” said Steven Zhu, analyst at Pacific Epoch. “E-commerce is the only sector that actually benefits from coronavirus simply because a lot of normal consumption is being shifted from offline to online.”

Click here for a live blog about the numbers.

Read more: Magic Johnson Selling Gels Reveals Why Alibaba Escaped Trump

Alibaba’s shares rose more than 60% from their Covid-19 era lows in March and hit a record high in October when Ant pegged it to go public. Retail and institutional investors had come to the record IPO of more than $ 35 billion, betting that Ant will overcome high valuations, regulatory headwinds and increased competition to reshape the future of global finance.

With the exception of the Covid-hit March quarter, Alibaba’s core business surge of 29% was its slowest in more than five years as consumers postponed their purchases before Singles Day. The closely monitored sales in customer management for Chinese retailers rose 20% in the quarter. According to CGS-CIMB analysts, including Lei Yang, core trade should expand at an average annual growth rate of 23% from 2021 to 2023.

What Bloomberg Intelligence Says

Alibaba could continue to benefit from the accelerated adoption of online grocery shopping, cloud computing and remote work applications by users and merchants, triggered by the Covid-19 outbreak in China. The domestic retail markets have fully recovered from the pandemic. Long-term sales and earnings growth could be driven by global expansion and monetization of newer businesses such as logistics, media and entertainment.

– Vey-Sern Ling and Tiffany Tam, analysts

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Alibaba’s cloud division revenue grew 60% in the quarter, driven by demand from internet, finance, and retail customers. The unit is expected to become profitable for the first time in the year through March, a goal reiterated Thursday by CFO Maggie Wu. This will be a milestone for the ten year old company, which has worked with companies like Amazon Web Services, Microsoft Corp. worldwide. and Google competes and at home upstarts like Tencent Holdings Ltd. fends off.

Alibaba is maintaining a steady pace of acquisitions to drive growth. The company has partnered with Richemont to raise a combined $ 1.1 billion in luxury e-commerce retailer Farfetch Ltd. invest to tap the growing demand for high-quality overseas goods in China’s middle class, a statement made Thursday. President Xi Jinping said Wednesday the country could import more than $ 22 trillion worth of products over the next decade.

In October, Alibaba also agreed to acquire a stake in the Swiss duty-free giant Dufry AG. Zhang said this is a “very important step” in helping the company expand its retail travel business as China develops domestic free trade ports. To capitalize on the online grocery boom, the company paid approximately $ 3.6 billion last month to increase its stake in Sun Art Retail Group Ltd. to double. It took control of one of China’s largest hypermarts to fend off rivals like JD.com Inc. Upstart Pinduoduo Inc. and Tencent-Backed Meituan.

Read More: Magic Johnson Selling Gels Shows How U.S. Brands Flock To Alibaba

(Updates with investments in paragraph 12)

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