Alibaba’s second quarter results show strong growth across the board, helping to lessen fears of a Chinese economic slowdown.
On the back of Amazon‘s surprise third quarter profit announcement last week, Alibaba Group released some blinding results for its fiscal second quarter. The Chinese giant showed red-hot growth across the board, eclipsing analyst expectations and helping to dispel some of the doom and gloom surrounding the Chinese economy.
For the quarter ended September 30th, 2015, group revenue jumped by 32 percent year-over-year, to RMB22,171 million (US$3.5 billion). Gross merchandise volume (GMV), which measures the total value of group merchandise sales, was RMB713 billion (US$112 billion), an increase of 28 percent year-over-year.
Mobile GMV accounted for 62 percent of total GMV transacted on its China retail marketplace. Mobile revenue was RMB10,520 million (US$1.7 billion), representing a year-on-year increase of 183 percent.
“This was a great quarter for Alibaba Group, with strong growth across the board and particular outperformance in mobile. We continued our efforts to drive healthy GMV growth, deliver an unparalleled consumer experience and help quality merchants do business on our platform,” said Daniel Zhang, Chief Executive Officer of Alibaba Group.
“We had very strong results this quarter. GMV grew to US$112 billion, a year-on-year increase of US$25 billion in this quarter,” said Maggie Wu, Chief Financial Officer of Alibaba Group. “We also made significant progress in monetisation and our revenue growth accelerated. Meanwhile, we generated strong free cash flow of US$2.1 billion this quarter. The fundamental strength of our business gives us the confidence to invest in our strategic priorities.”
“Our ecosystem continues to thrive,” the company said. “By the end of the September quarter, our annual active buyers grew to 386 million, and mobile MAUs grew to 346 million.
“User engagement is healthy with more buyers purchasing across more categories. We are fortifying our market leadership in the major cities.”
Alibaba’s blinding results come less than a week after Amazon surprised nearly everyone by announcing a profit for the second quarter in a row. Over the quarter ended 30th September, the US giant posted a net income of US$79 million, following on from the net income of US$92 million posted over Q2 of 2015.
Amazon reported sales of US$25.4 billion, representing a 23 percent increase year-over-year. The surprise Q3 profit announcement sent Amazon stock prices soaring, swelling market capital by US$25 billion.
Alibaba’s better-than-expected results bumped its share prices by 8.6 percent in premarket trading to their highest level in over two months. While its share prices are now back above their IPO price, they are still a long way from their pre-IPO highs.