Alibaba Group Holding Ltd. slashed its growth expectations for this fiscal year, as Chinese consumers spend less in an increasingly competitive e-commerce market.

The retail behemoth said it expects its fiscal 2022 revenue to increase by 20% to 23%, down from its forecast of about 30% in May. In an earnings call Thursday, company executives attributed the more-pessimistic outlook to a slowdown in consumer spending in the world’s second-largest economy and an abundance of e-commerce rivals.

“We...

Alibaba Group Holding Ltd. slashed its growth expectations for this fiscal year, as Chinese consumers spend less in an increasingly competitive e-commerce market.

The retail behemoth said it expects its fiscal 2022 revenue to increase by 20% to 23%, down from its forecast of about 30% in May. In an earnings call Thursday, company executives attributed the more-pessimistic outlook to a slowdown in consumer spending in the world’s second-largest economy and an abundance of e-commerce rivals.

“We believe that these two reasons are the factors we should consider,” said Chief Executive Daniel Zhang, adding that it was difficult to quantify how much of a role each played. “Our performance to some extent will reflect the overall market condition.”

Earlier this month, Alibaba’s biggest shopping event of the year, known as “Singles Day,” notched record sales of about $84.5 billion. However, year-over-year growth was at its slowest pace since the festival started in 2009, a sign of market saturation and plateauing online consumption.

Retail sales, a key gauge of China’s consumption, rose 2.5% in August, the slowest pace of growth in a year. However they notched more robust growth of 4.9% in October, coming in stronger than economists’ expectations.

Alibaba said profits fell for the recent quarter, hurt by losses arising from changes in prices for investments in publicly traded companies, as well as higher investments in what it considers key strategic areas. In the July-September quarter, net income attributable to shareholders was 5.37 billion yuan, or $833 million as of Sept. 30, down from 28.77 billion yuan in the same period last year.

Alibaba’s American depositary receipts fell more than 10% after the market opened Thursday morning. The company’s stock has fallen more than 30% so far this year.

The company has ratcheted up spending on building out its e-commerce platforms in areas like discount goods and live streaming to fend off rivals. In May, Alibaba said it would invest any incremental profits into improving its business, gaining new users and supporting merchants on its platforms.

Mr. Zhang said Thursday that Alibaba would continue to invest in areas that drive growth, including domestic consumption, international business and cloud computing.

Alibaba has faced an increasingly crowded e-commerce landscape in China, as rivals like ByteDance Ltd.’s short-video platform Douyin and discount-shopping app Pinduoduo Inc. have made inroads with Chinese consumers. While Alibaba’s flagship Taobao and Tmall shopping platforms have long been the go-to destination for consumers, challengers have gained ground through new and interactive ways of making purchases, such as through gaming, videos and messages.

“The definition of e-commerce actually is evolving,” Mr. Zhang said. “As long as you have some traffic…anybody can try something on e-commerce.”

Singles Day in China is the world’s largest annual shopping extravaganza. Its creator, the e-commerce giant Alibaba, is now exporting the event to the rest of the world as part of its push to challenge Amazon and others. Photo: Geoffroy Van der Hasselt/Agence France-Presse/Getty Images The Wall Street Journal Interactive Edition

Alibaba has also come under unprecedented regulatory pressure this year. In April, Alibaba was hit with a record $2.8 billion fine after an antitrust investigation by Beijing’s top market regulator found it had abused its dominant market position. The government has issued new guidelines for tech platforms opposing anticompetitive business practices, such as misleading consumers or blocking competitors’ links.

The e-commerce giant, along with other major Chinese tech companies, has emphasized its positive contributions to society, as the government has sought to curb what it sees as societal ills and large corporations’ roles in them. This Singles Day, Alibaba said it was looking beyond the typically flashy final sales numbers and played up its charitable donations and environmentally friendly products.

In September, Alibaba announced a $15.5 billion donation to Beijing’s “common prosperity” campaign, allocating the funds toward tech innovation, economic development, job creation, assistance for vulnerable groups and other initiatives.

Ant Group, Alibaba’s financial-technology affiliate, had an estimated net profit of 19.7 billion yuan in the quarter ended June 30, up 39% from the same period a year ago, according to The Wall Street Journal’s calculations based on Alibaba’s earnings disclosures.

The surge in Ant’s profit was mainly due to fair-value gains in investments held by Ant, according to Alibaba’s disclosure. Alibaba owns a third of Ant and reports its share of profits from the online-payments giant one quarter in arrears.

—Dave Sebastian and Jing Yang contributed to this article.

Write to Stephanie Yang at stephanie.yang@wsj.com