Chinese e-commerce giant Alibaba reported second-quarter revenue increase of 3.2-billion U.S. dollars, a 28-percent gain, but it was the lowest rate of revenue growth in more than 3-years, and resulted in the stock falling to its lowest levels since its September 2014 IPO.

Net income was up nearly 150-percent, boosted largely by the sharp rise in the share price of its subsidiary, Alibaba Pictures. But the data disappointed investors, with Alibaba shares falling 6.7 percent on the day, to around 80 dollars per share. Despite an announced stock buyback program of up to 4 billion U.S. dollars, the stock has continued to drift lower dropping below 75.

So what happened?

Alibaba, China's biggest online commerce company, is still making progress. Revenue growth on an industry basis was phenomenal, it is also making inroads in the key mobile market, doing more business with consumers on their mobile platform. The mobile commerce market has been considered an area of weaknesses for Alibaba, as its initial successes were based on the desktop. It is feeling the heat from domestic rivals like JD.com, which despite being vastly smaller, continues to grab market share.

Some analysts think the slower growth is the result of management changes that began last March at the top ranks at Alibaba's shopping platforms. Much has changed for Alibaba in the last year, since its listing. The company appointed a new chief executive, Daniel Zhang and a new president in charge of international expansion, a former Goldman Sachs executive, Michael Evans. Their main growth targets have been international markets, using brands, and domestic growth through developing China's rural e-commerce. The problems here, include an overvalued tech market which makes acquisitions expensive and the logistical costs and difficulties of goods delivery in rural markets.

Others said that after its record high IPO in the US last year, it should have focused more on overseas expansion. The difficulty here is that Alibaba's component pieces while dominant in China are up against established rivals in the international markets like Amazon. In terms of acquisition, the current market conditions makes this expensive and the rapid pace of technological developments makes it risky.

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