Chinese e-commerce giant Alibaba said
Thursday that first quarter revenue beat analyst estimates, defying a
slowing
economy and a trade war with the United States.
Revenue for the April-June period rose 42 percent year-on-year to
114.9
billion yuan ($16.7 billion), a company statement said, outpacing an average
analyst estimate of 111.6 billion yuan compiled by Bloomberg News.
Joe Tsai, Alibaba’s Executive Vice-Chairman, attributed the results to
China’s demographic trends and continued urbanization, pointing to the
growing urban middle class willing to shell out for brands on Alibaba’s
e-commerce platforms.
Net profit for the quarter was 21.2 billion (3.1 billion dollar),
more than
double from the same period a year earlier.
Revenue in the Hangzhou-based company’s core e-commerce segment, which
accounts for the vast majority of its business, jumped 44 percent, while the
smaller but fast-growing cloud computing unit surged 66 percent.
“Alibaba had a great quarter, expanding our user base to 674 million
annual
active consumers, demonstrating our superior user experience,” said Daniel
Zhang, Chief Executive Officer of Alibaba.
“We will continue to invest in technology and bring digital
transformation
to millions of businesses globally.”
Alibaba has been pouring money into what it calls “new retail”, which
optimises in-store sales and service using data culled online.
It has also been fighting to grow its business abroad, primarly in
Southeast Asia where it runs the Lazada e-commerce platform.
Orders on Lazada grew over 100 percent on-year for the third consequtive
quarter, the company said.
Alibaba’s large entertainment division including the Netflix-like
Youku
grew 6 percent, as China’s movie industry faces a tough regulatory
environment
with authorities canceling films they deem unpatriotic and continually
changing censorship guidelines.
Zhang told investors the movie streaming platform is investing in
original
content with average daily subscribers up 40 percent year-on-year.
Alibaba dominates China’s rapidly expanding consumer culture and its
corporate results are typically closely watched for any signs that a Chinese
economic deceleration and the US-China trade tensions were turning off
shoppers.
Companies such as Alibaba are at the nexus of a national economic
strategy
to encourage more domestic consumer spending and thereby lessen the reliance
on fickle foreign demand for Chinese exports. (AFP)
