By Jonathan Davies

Chinese e-commerce giant Alibaba has reported a 28% fall in profits for the third quarter.

Sales were up 40% to $4.22bn, but they were below forecasts and a one-off financing fee, higher taxes and disappointing Christmas sales held back profits.

It is Alibaba's first trading update since the record-breaking $25bn floatation in September.

Despite the disappointing figures, Alibaba's profit margin grew by 50.5% to 58% in the three months after the floatation.

Separately, Alibaba is facing huge criticism from the Chinese State Administration for Industry and Commerce (SAIC) over the sale of fake goods.

The SAIC accused the e-commerce giant of "narcissism" and failing to ensure the standard of goods being sold. Some had been found to infringe trademarks and even illegally imported.

In a rather unusual move, Alibaba reacted by accusing the SAIC official of "professional misconduct". It said "we welcome fair and just supervision, and oppose selective omissions and malicious actions".

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