Quarterly increase of 59% boosts hopes on consumer spending
Alibaba Group Holding Ltd saw 59 percent year-on-year increase in revenue in the quarter ended June, beating analysts' expectations and boosting confidence that consumer spending in China remains strong despite the economic slowdown.
The Hangzhou-based company said on Thursday its revenue totaled 32.15 billion yuan ($4.84 billion), driven by the robust growth of its core e-commerce business and cloud computing.
Net profit was 7.1 billion yuan, also beating estimates.
Daniel Zhang, CEO of Alibaba, said: "By offering smart and personalized services, we have changed the way 434 million active users interact with each other on our platform."
From April to June, the gross merchandise volume transacted on its online retail marketplaces reached 837 billion yuan, making a year-on-year growth of 24 percent.
The company's hefty investments in cloud computing have also started bearing fruit.
In this quarter, the revenue for its cloud unit jumped more than 150 percent to 1.24 billion yuan.
Alibaba has been banking on cloud computing as one of its next big growth engines in the big data era. It announced on Wednesday it will open four overseas data centers in Japan, Europe, Australia and the Middle East by the end of this year.
The company has achieved a new milestone in its mobile strategy this quarter.
"For the first time, the monetization rate from mobile devices exceeded that from personal computers," said Maggie Wu, chief financial officer of Alibaba.
Its mobile revenue in China increased 119.3 percent to 17.51 billion yuan, while monthly mobile active users also increased 39 percent.
Alibaba's results came on the heels of improving national retail data. According to the National Bureau of Statistics, the year-on-year growth of online retail sales in the second-quarter re-accelerated to 28.5 percent, compared with 27.8 percent in the first quarter.
Vinsan Wang, an analyst at Tiger Brokerage Group, which provides internet brokerage business for US and Hong Kong stocks, said the strong financial performance demonstrated Alibaba's initial success in seeking revenue source beyond e-commerce.
"Its cloud computing is on the right track and growing rapidly," Wang said. "After acquiring the Chinese video-streaming site Youku Tudou Inc, Alibaba also has a big presence in the media industry. But it will take longer time before the firm reaps fruit from the sector."
