Alibaba Group revenue soars 61 per cent

Alibaba Group revenue soared 61 per cent in the second quarter as the behemoth achieved a record 576 million active annual consumers in its marketplace – 24 million more than three months earlier.

Total revenue was RMB80.92 billion (US$12.229 billion), with revenue from core commerce increasing by the same rate to RMB69.188 billion (US$10.456 billion).

Cloud-computing turnover rose 93 per cent, entertainment and media by 46 per cent and revenue from innovation initiatives and other activities by 64 per cent.

The number of mobile monthly active users on China retail marketplaces reached 634 million in June 2018, up 17 million on three months earlier.

Adjusted earnings before interest tax and amortisation for Alibaba’s core commerce operations was RMB32.797 billion (US$4.956 billion), an increase of 22 per cent year on year, representing a margin of 47 per cent. Net income attributable to shareholders was RMB8.685 billion (US$1.313 billion), down on the same period last year due to a one-off accounting adjustment relating to Ant Financial. Without that, profit would have risen about 33 per cent.

“Alibaba had another excellent quarter, with significant user expansion and even more robust engagement across our growing ecosystem,” said CEO Daniel Zhang. “Our China retail marketplace business continues to gain share, with New Retail initiatives driving further revenue growth and enabling our retail partners to seamlessly serve customers.

“We are executing our plan of providing more value and choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce,” he said.

“We will continue to invest in strategic business opportunities and innovation to sustain our competitive advantage and for long-term growth.”

CFO Maggie Wu said the company was pleased with the strength and rapid growth of its business at such significant scale.

“The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validates our strategy of investing in customer experience, product, technology and infrastructure for the future. We remain confident

in our ability to continue to gain market leadership by delivering unique value propositions to our business customers, partners and consumers,” said Wu.

Taobao growth

Alibaba Group says growing use of its Taobao app helped grow the number of active monthly users on the Taobao platform rise by 17 million during the quarter, taking the total to 634 million.

“Ongoing improvements in search and personalised recommendations on the Taobao App supported the acceleration of Taobao paid gross merchandise volume (GMV) growth during the quarter,” the company said. “During the quarter, around 80 per cent of the increase in annual active consumers were from lower tier cities as the platform broadened its offerings and services into those regions.

Tmall gains wallet share

Tmall, meanwhile, continued to gain wallet share and expand Alibaba Group’s B2C market leadership, the company said.

Excluding unpaid orders, physical goods GMV grew 34 per cent year on year during the quarter. “The robust growth was driven by continued increases in conversion rates and average consumer spending with strong performance from FMCG, consumer electronics, apparel and home goods categories.

“Tmall gained further mindshare among domestic and international brands as the leading brand-building and distribution platform that is capturing increasing consumer exposure and spending by users in China. During the quarter, international brands such as MCM, Moschino and Giuseppe Zanotti launched flagship stores on Tmall and joined the Luxury Pavilion, its customised and premium shopping experience for consumers.”

Alibaba results graphic

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