Shanghai: Alibaba.com, China’s largest e-commerce company, posted a 49% rise in quarterly net profit as revenue growth accelerated on the back of strong customer additions.
Alibaba, Yahoo’s business partner in China, said last month it would cut basic membership fees for Chinese customers in a bid to boost its subscriber base. Analysts said that would be positive long term, but warned of near-term margin pressure.
Alibaba said it saw China export volumes this year at 2007 levels, but did not see it as a key driver of the economy. The company also said it would take a cautious view towards investing this year.
“As we continue to see strong growth in our user numbers, we need to invest to improve our service standards and prepare ourselves to handle our anticipated growth,” said chief executive David Wei in a statement.
The company, which operates an online site connecting millions of buyers and sellers, forecast in December that this year’s profit would beat last year’s as China’s foreign trade revives and the global economy shows signs of recovering from the sharp downturn.
The listed unit of Alibaba Group, in which Yahoo! Inc holds a near-40% stake, competes with Global Sources in China’s 1.5 billion yuan ($220 million) business to business (B2B) industry.
October-December profit rose to 281.15 million yuan ($41.19 million) from 189.18 million yuan a year earlier. That lagged an average analyst forecast of 290.6 million yuan, according to Thomson Reuters.
The company’s shares more than tripled last year as China launched a massive stimulus plan to prime its economy at the height of the global recession.
Alibaba shares closed up 3.6% earlier on Tuesday ahead of the quarterly results, its highest close in nearly two months, and have gained 2% this year, beating the broader Hang Seng Index’s 0.27% decline.
Web commerce in China has surged in recent years, as buyers look to the Internet for better deals from more reliable suppliers in the nation’s highly fragmented e-commerce sector.