Alibaba posted disappointing quarterly sales on Thursday as the e-commerce giant hit back against "unfair" Chinese government allegations that it failed to crackdown on illegal transactions. The online shopping platform posted a 40 percent jump in sales to $4.219 billion, but that missed the $4.45 billion in revenues that analysts were expecting. China makes up by far its biggest market with sales of $3.429 billion, as Alibaba operates the country's most popular online shopping platform Taobao. But the company this week came under unprecedented attack from a powerful regulator in China. The State Administration for Industry & Commerce (SAIC), charged with maintaining market order in China, Wednesday accused Alibaba of allowing "illegal operations" to flourish on its online shopping websites and ordered the company's executives to "overcome arrogance". The sharp criticism came after a SAIC survey published last week on Taobao that found only about a third of products sampled to be genuine. "We believe the flawed approach taken in the report and the tactic of releasing a so-called white paper specifically targeting us was so unfair that we felt compelled to take the extraordinary step of preparing a formal complaint to the SAIC," Alibaba Vice-Chairman Joe Tsai said Thursday. Alibaba now counts 334 million active buyers. Revenues generated from such mobile devices leapt five-fold (448 percent) to $1.035 billion for the third quarter, to make up 42 percent of total sales. This figure has been rising steadily, from 36 percent in the previous quarter and from 20 percent one a year ago. Net profit for the three months ending December plunged 28 percent to $964 million, while earnings per share rose 13 percent to 81 cents.