March 19 (Reuters) - Alibaba ( BABA ) on

Thursday reported a 1.7% rise in third-quarter revenue that

missed analysts' estimates, as heavy spending on one-hour

delivery and promotions during the peak shopping season did not

translate into a surge in demand.

Alibaba's ( BABA ) U.S.-listed shares fell nearly 4% in premarket

trading.

China's largest e-commerce company booked revenue of 284.84

billion yuan ($41.28 billion) for the three months through

December, compared with estimates of a 3.7% rise, or 290.7

billion yuan, according to an average of 21 analyst estimates

compiled by LSEG.

Its net income fell 66.3% to 15.63 billion yuan.

A prolonged property crisis, coupled with concerns about

income stability, continued to weigh on consumer sentiment,

limiting spending even during traditional high seasons for

spending.

Singles' Day sales extended to over a month of promotions

but saw muted enthusiasm. Retailers ramped up discounts and

subsidies to encourage spending, but cautious consumers and

year-round deals diluted the event's traditional sales surge.

Retailers, including Alibaba ( BABA ) and JD.com ( JD ),

intensified competition during the quarter, spending heavily on

discounts and faster delivery to capture market share from

food-delivery leader Meituan ( MPNGF ), pressuring profit

margins.

In the budget segment, Alibaba ( BABA ) continued to face stiff

competition from PDD Holdings' ( PDD ) Pinduoduo and

ByteDance-owned Douyin, which often offer deep discounts and

year-round promotions to attract price-sensitive consumers.

($1 = 6.9003 Chinese yuan renminbi)

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini

Ganguli)