ONLINE WOES: Pressures are mounting on Alibaba.com, the country's top e-business site, amid worries that small and medium-sized exporters-its main clients-will be affected by a slowing economy

With its stock prices in a freefall and its domestic rivals aggressively gobbling up market share, Alibaba.com Ltd., the country's top e-commerce firm, is facing some tough times.

When the Hangzhou-based company debuted in Hong Kong in a $1.49-billion IPO last November-before all the bad news about Wall Street had hit home in Asia--its share price promptly tripled to HK$39.50 on its first day of trading.

How times have changed. Since then, Alibaba's shares have nose-dived by a staggering 90 percent, hitting an all-time low of HK$ 3.90 a share on October 28 amid concerns about the growth of its premium membership as the U.S. economic washout continues to effect more countries around the world.

The company, founded in 1999, has enjoyed spectacular growth by serving tens of thousands of small and medium-sized exporters and importers in China with its online business-to-business site. But as the exporters feel the pain of a stronger yuan and growing costs in recent years, their demands for e-commerce have declined to a trickle. Worse still, fears of a global economic recession have cast a pall over China's e-commerce industry.

Huang Wenge, a senior IT analyst at China Essence Securities Co. Ltd., told Beijing Review that investors' dim prospects for Alibaba are mainly due to worries over its faltering customer growth in a slowing global economy.

"Those who are suffering most nowadays are small and medium-sized exporters, who are Alibaba's main customers," Huang said.

According to the company's mid-year financial report, the number of Alibaba's paying members grew by an annual 10 percent in the first half of 2008, a precipitous drop from the 44.5-percent and 39-percent growth rates in 2006 and 2007, respectively. The big increase in Alibaba's number of premium members, whose payments account for around half of the company's total revenue, also has fizzled, according to the report.

Even Jack Ma Yun, Alibaba's Chief Executive Officer, has foreseen a "winter chill" period for the country's e-business.

"We're prepared for the winter, so we have reserved a lot of cash," Ma said in a report to his staff in July.