Retail in Asia

In Trends

Alibaba.com should change model to improve profit, says analyst

Hurt by a shrinking pool of paying members, China’s biggest listed e-commerce company Alibaba.com posted a 25 percent drop in first quarter profit and one analyst tells CNBC the pressure on earnings could stay unless the company changes its business model.

"The membership business in China is just not working out and we think they need to go more for a pay by performance model where people actually pay based on the performance of the platform," Jin Yoon, Regional Head of Internet Research for Asia ex-Japan at Nomura, told CNBC Asia’s "The Call" on Tuesday.

The pay by performance model takes into account, for example, the number of clicks a product, listed for sale on the website, gets.

(Source: CNBC)