China's Alibaba first quarter revenue leaps 59%,since IPO

Chinese e-commerce giant Alibaba saw revenues leap 59 percent year-on-year for the quarter ended in June, it said Thursday, its strongest growth since it listed on the New York Stock Exchange in 2014.

Revenue for the company, seen as a proxy for China's increasingly crucial consumer sector, reached 32.15 billion yuan ($4.83 billion) in the June quarter, it said in a statement.

The total was well ahead of the 30.2 billion-yuan average of estimates compiled by Bloomberg News. 

Alibaba is China's dominant player in online commerce, with its Taobao platform estimated to hold more than 90 percent of the consumer-to-consumer market, and its Tmall platform is believed to have over half of business-to-consumer transactions.

But according to the company net income plunged 77 percent year-on-year to $1.08 billion in the latest quarter -- the first of its financial year.

Still, Alibaba's chief financial officer Maggie Wu described the results as "excellent". 

"The 59 percent revenue growth for the company overall and the 49 percent revenue growth of our China retail marketplaces represent the highest growth rates we’ve achieved since our IPO," she said in the statement.

The company's gross merchandise volume (GMV) -- a measure of value for online sales -- rose 24 percent year-on-year to $126 billion in the June quarter, the statement said, matching the growth of the previous three months.

The company, often compared to eBay or Amazon of the United States, has expanded outside its core e-commerce business, in sectors ranging from sports to entertainment.

"Our results show the scale and leverage of our ecosystem, as we strengthen our competitive positions in core commerce, cloud computing and digital media and entertainment," Alibaba chief executive officer Daniel Zhang said in the statement.

- Alibaba 'makes the rules' -

In the June quarter, paying customers for Alibaba Cloud, its cloud computing unit, grew to 577,000, with the segment's revenue booming by 156 percent year-on-year.

"The focus of its strategy is no longer (online) retail. It has moved to underlying services such as finance, cloud services and logistics," Li Chengdong, an independent e-commerce strategy analyst based in Beijing, told AFP.

"Alibaba is using the strategy of being a platform and ecosystem for others," he said. "Alibaba makes all the rules and profits from those rules. That is what makes it a greater company than its peers."

JD.com, a Chinese competitor of Alibaba, on Wednesday reported its net revenue for the second quarter increased 42 percent on the year to $9.8 billion, but it also registered a net loss for the period.
Alibaba is not without controversy. It has faced accusations over the sale of counterfeit goods on its platforms, which the company says it has sought to address.

In June, Alibaba founder Jack Ma said that unbranded goods were often better than the branded originals they imitate, drawing criticism from some industry groups.

"The problem is that the fake products today, they have better quality, a better price than the real product, than the real names," Ma told investors.

Separately, the US stock market regulator has opened an investigation into Alibaba's accounting practices, the company revealed in May.

The US Securities and Exchange Commission (SEC) had sought information into Alibaba's accounting for its Cainiao logistics network and its reporting practices for Singles Day, a huge sales event in China.

Ma, who is also executive chairman, told state media in June that the company was assisting in the SEC probe.

Source: AFP