HONG KONG • Alibaba Group Holding Ltd raised its outlook for full-year revenue growth after reporting sales that beat estimates, driven by a leap in Chinese consumer spending and a push into new businesses.
China’s biggest e-commerce company is now predicting a 49% to 53% rise in revenue in the current fiscal year, after acquiring the Cainiao logistics business. For the September quarter, it reported 61% revenue growth, its fastest as a public company, as mobile spending surged and the cloud division kept up a blisterin pace of growth. Shares in Alibaba climbed 3.5% in pre-market trade.
The Internet giant has opened its wallet to woo shoppers and improve marketing services for merchants while splurging billions to look for new sectors of growth. It’s shaking up supermarkets and department stores while investing in artificial intelligence and cloud computing, areas in direct competition with Amazon.com Inc and Tencent Holdings Ltd. Alibaba’s cloud business almost doubled revenue in the quarter.
“The margins were better than expected,” said Billy Leung, a Hong Kong-based analyst with Haitong International Securities Co. “It’s definitely a positive for the company.”
Next week Alibaba holds its annual Singles’ Day promotion, the biggest shopping event on the calendar. Last year, transactions on its platforms reached 120.7 billion yuan (RM77.25 billion), dwarfing US promotions Black Friday and Cyber Monday. Sales for the quarter were 55.1 billion yuan, surpassing the 52 billion-yuan pro- jected by analysts. Adjusted earnings-per-share were 8.57 yuan compared to the 6.90 yuan average of estimates.
Core commerce, which remains by far the largest slice of Alibaba’s business, surged 63% to 46.5 billion yuan, buoyed by 488 million active consumers on its Chinese retail market-places. A lot of that growth stemmed from spending via smartphones, as mobile monthly active users reached 549 million.
Alibaba is now building on that still- expanding user base by devising a series of expensive forays into physical retail — part of billionaire Jack Ma’s ambition to revamp a US$4 trillion (RM16.92 trillion) sector. His vision has been echoed by Amazon’s Jeff Bezos via his acquisition of Whole Foods Market Inc. Alibaba is trying to transform the way retailers monitor inventory based on real-time demand to make multiple layers of middlemen redundant. Drawing more physical stores into its network boosts online orders and provides abundant data to target future consumers.
“We are seeing the early results from our efforts to integrate online and off- line with our new retail strategy,” CEO Daniel Zhang said in a statement.