China’s Alibaba Group Holding on Wednesday missed analysts’ estimates for third-quarter revenue, hurt by strong competition and faltering economic recovery in the world’s second-largest economy.

US-listed shares of Alibaba fell nearly 6% as the company’s plan to buy back $25 billion of its stock failed to drum up investor enthusiasm.

Alibaba’s Hong Kong shares were down 5.4% early on Thursday.

The company is facing severe competition from rivals such as Douyin and PDD Holdings, which have changed the e-commerce landscape by selling lower-cost and discounted items year-round.

In the largest restructuring in Alibaba’s 24-year history, the company announced last March it would split into six units to combat slower earnings growth. But just a few months later, the plans for the spin-off and IPO for the cloud unit was scrapped amid uncertainties over U.S. curbs on exports to China of chips used in artificial intelligence applications.

“Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing,” CEO Eddie Wu said on Wednesday. Wu, group CEO since September, directly oversees both the domestic e-commerce arm and Alibaba’s cloud unit. Alibaba’s net income attributable to ordinary shareholders was 14.4 billion yuan ($2 billion) and net income was 10.7 billion yuan, down 77% primarily due to valuation changes from equity investments and impairments related to hypermarket operator Sun Art and online video streaming service Youku. “They (Alibaba) indicated that 2024 will be an investment year … so the profitability will likely decrease because of this,” US Tiger Securities analyst Bo Pei said.

Taobao and Tmall Group revenue grew only 2% for the quarter, including year-end sales events such as Singles Day that have traditionally provided a boost for the online shopping sites.

Executives on a post-earnings call said there was early evidence of a recovery in Taobao and Tmall Group’s gross merchandise volume or GMV.

“Our strategy is focused on increasing purchasing frequency, if we do that we will achieve better GMV growth,” Wu said.

Rival PDD, which owns Pinduoduo and overseas-focused platform Temu, overtook Alibaba on Dec. 1 to become the most valuable Chinese e-commerce company after Morgan Stanley downgraded Alibaba on concerns over a slower turnaround in its cloud business and customer management revenue.

This quarter, executives also seemed cool about the near-term potential of public offering prospects for its Cainiao logistics and its grocery business Freshippo, saying these IPOs had always been subject to market conditions which currently were not in a state to reflect the intrinsic value of these businesses.

Last week, sources told Reuters that Alibaba was looking to sell a number of consumer sector assets, including Freshippo, which has been locked in a price war with Walmart’s membership chain Sam’s Club, leading both sides to cut prices on popular items.

A Freshippo spokesperson has denied the reports of a potential sale.

On a call with analysts following earnings, Alibaba Chairman Joe Tsai said it “makes sense” to exit some of the traditional physical retail businesses on its balance sheet, “but it will take time due to challenging market conditions”.

Alibaba’s International Digital Commerce (AIDC) arm, which operates various retail and wholesale marketplaces including AliExpress and Alibaba.com., performed strongly, with AliExpress orders rising 60% on the year.

“There is huge potential for AIDC to increase penetration in many markets,” the unit’s chief executive, Jiang Fan, said on the call with analysts.

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