Alibaba sales and earn­ings buck the eco­nomic trend

China Daily (USA) - - BUSINESS - By BLOOMBERG

Alibaba Group Hold­ing Ltd showed once again that a slow­ing Chi­nese econ­omy isn’t hold­ing it back.

The coun­try’s largest op­er­a­tor of in­ter­net shop­ping malls posted sales and earn­ings that beat an­a­lyst es­ti­mates as rev­enue eas­ily out­stripped eco­nomic growth.

More­over, Alibaba’s fledg­ling cloud com­put­ing busi­ness more than dou­bled sales and al­most broke even, a sig­nif­i­cant feat for a cap­i­tal-in­ten­sive busi­ness.

The re­sults come about a week be­fore Katy Perry kicks off Alibaba’s an­nual Sin­gles Day event (Nov 11), the world’s big­gest 24-hour shop­ping pro­mo­tion and a closely watched barom­e­ter of Chi­nese con­sumer de­mand. Alibaba con­tin­ues to cap­ture a greater share of dig­i­tal ad­ver­tis­ing as users shift to mo­bile de­vices and mar­keters spend more money on­line to reach them.

“I don’t know if any­one’s do­ing bet­ter than Alibaba,” said Gil Luria, an an­a­lyst at Wed­bush Se­cu­ri­ties Inc, com­ment­ing on Chi­nese in­ter­net com­pa­nies. “They were able to drive growth by ex­pand­ing be­yond e-com­merce in mo­bile brows­ing, me­dia, cloud and con­tin­ued to in­crease their num­ber of ads and the money they charge for it.”

Rev­enue rose 55 per­cent to 34.3 bil­lion yuan ($5.1 bil­lion) in the quar­ter, sur­pass­ing the 33.9 bil­lion-yuan ex­pected by an­a­lysts. Alibaba’s quar­terly sales have now beaten es­ti­mates for five straight quar­ters and have missed only twice since its record IPO in 2014.

Shares of Alibaba rose as much as 2.7 per­cent in early trade on Wed­nes­day. The stock has gained about 24 per­cent af­ter a 22-per­cent dive in 2015, when the com­pany grap­pled with the slow­down and law­suits ac­cus­ing it of be­ing slow to re­move coun­ter­feits from its web­sites.

While core com­merce rev­enue rose 41 per­cent to 28.5 bil­lion yuan in the Septem­ber quar­ter, the cloud unit was the star per­former.

The divi­sion, which com­petes with Mi­crosoft Corp and Ama­zon.com Inc, grew sales by 130 per­cent and nar­rowed its loss to 57 mil­lion yuan af­ter more than dou­bling the num­ber of pay­ing cus­tomers to 651,000.

XU KANGPING / FOR CHINA DAILY

Alibaba Group Hold­ing Ltd’s Tmall Global and Xianyu Auc­tion plat­forms put three bot­tles of fresh air col­lected from New Zealand on auc­tion in Hangzhou, Zhe­jiang prov­ince.

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