Alibaba sales beat estimates on surging Chinese consumer demand
Hong Kong: Alibaba Group Holding Ltd.’s quarterly revenue beat analysts’ estimates, powered by Chinese consumers’ thirst for cheaper and higher quality goods online.
Revenue at China’s biggest e-commerce company rose 56% to ¥50.2 billion ($7.4 billion) in the three months ended June, the company said. That compares with the $7.2 billion average of estimates compiled by Bloomberg. It reported non-GAAP diluted earnings-per-share of $1.17, versus the $0.94 projected.
Alibaba bolstered its dominance in e-commerce by improving the advertising algorithms it uses to generate revenue from brands trying to reach the 466 million active consumers on its online platforms. That is buying time for billionaire Chairman Jack Ma to venture into traditional retail, a sector he wants to revamp via experiments like HeMa Supermarket, a fresh foods store that comes with an additional cooking service and provides online grocery delivery.
“The big data driven algorithm provides a good balance between merchants’ ad budget” and user preference, Barclays Capital Inc. analyst Gregory Zhao said in a report before the earnings. “While core commerce is the engine for Alibaba’s near-term growth, new retail is expected to shape Alibaba’s business model in the long run.”
Revenue from its core commerce operation climbed 58% to $6.3 billion, while cloud revenue almost doubled to $359 million as paying customers for the business surpassed 1 million for the first time.
Shares of Alibaba rose 1.1% to in New York on Wednesday. The stock has gained 82% this year compared with a 7.3% gain for the NYSE Composite Index. Bloomberg
- Supreme Court rejects Essar’s plea against Hazira port expansion
- HDFC Property Fund aims to raise $500 million from overseas investors
- Essar Oil seeks loans from traders as banks fear Russian links
- CoLive raises Rs12 crore from SAR Group and others
- Cybercrimes cost firms $600 billion last year: McAfee report