Alibaba Group Holding Ltd Chairman Jack Ma, looking to calm investors after a slide in the e-commerce company’s shares, said concerns about slowing consumption in China were overdone.
Alibaba has lost more than a third of its value so far this year as fears of slowing growth in China, the company’s biggest market, unnerved investors.
Ma, in a letter to investors on Thursday, sought to downplay such concerns.
“We predict that over 50 percent of China’s consumption will be conducted online within 10 years, and that means massive potential for the e-commerce market,” Ma said.
Alibaba, however, has been struggling with slowing growth in recent months.
It warned in September that the total value of transactions in the second-quarter would be lower than previously thought, a fresh signal that China’s slowdown was taking a bite out of consumer spending.
“Recently, signals of China’s economic slowdown have triggered widespread concern and, I believe, overreaction around the world,” Ma said in the letter.
China’s economy grew 7 percent in the second quarter, according to the National Bureau of Statistics, and the government expects full-year growth to be about the same, making it the weakest annual growth in 25 years.
Ma said the current GDP growth pattern was not sustainable.
“If China continues to pursue the high growth rates of the past, then China will pay a high price,” he said, adding that the country’s economic development should be focused more on quality than on quantity.
Alibaba’s shares were up 1.1 percent at $66.99 in morning trading on the New York Stock Exchange on Thursday.