Alibaba's shares drop as sales fall short of targets

Shares in the Chinese e-commerce giant Alibaba fell 7% after sales fell short of targets.

A 40% rise in revenues to $4.22bn, was a disappointment to investors who had expected a figure closer to $4.4bn

Its results were the first since its record-breaking $25bn flotation in New York in September.

Profits fell 28%, hit by a one-off financing fee and higher taxes while sales during the crucial holiday season were disappointing.

But the group, founded by entrepreneur and billionaire Jack Ma is making more on every sale, with margins up to 58% from 50.5% in the three months before the flotation.

Meanwhile Alibaba is in trouble with China's State Administration for Industry and Commerce (SAIC).

It accused Alibaba bosses of "narcissism" and claimed they were failing to do enough to address the sale of goods that were trademark-infringing, substandard, and sometimes illegally imported.

In an unusual move, Alibaba responded by accusing the SAIC official of "professional misconduct", saying, "we welcome fair and just supervision, and oppose selective omissions and malicious actions."

Alibaba has an 80 percent share of the Chinese online commerce market, operating the country's most popular online shopping platform Taobao,

China now accounts for $3.43bn of its sales.

Its heavy investment in apps to get customers to order through mobile devices has meant 43% of revenues now come from smartphones, up from 20% just one year ago.