$12.4 Billion and Counting, How Alibaba Pulled off 54% YOY Growth

For the period ending September 2018, Alibaba has reported a 54 percent growth in revenue year-on-year, with RMB 85.1 billion ($US12.4 billion) in total sales.

The bulk of this revenue came from its core commerce offerings, with RMB 72.5 billion ($US10.6 billion) in sales, followed by its digital media and entertainment revenue (RMB 5.9 billion/$US 865 million) and cloud computing revenue (RMB 5.7 billion/$US825 million). The company also recorded a 20 percent increase in revenue from innovation initiatives equating to $US 155 million.

“We outpaces all industry peers by again delivering robust revenue growth of 54 percent this quarter,” said Maggie Wu, Alibaba Group’s CFO.

“While the growth of our overall profitability this quarter has been tempered by significant investments in local services, logistics, entertainment and international expansion, our core marketplace business continued to show strong profit and cash flow growth, which enables us to re-invest into strategic areas and our technology,” she continued.

Another highlight from the quarter was the business’s growth in active customers, with the company’s total count rising to 601 million, with 25 million net adds. Of the new shoppers, Daniel Zhang, Alibaba Group’s CEO says 75 percent are customers shopping from less developed areas.

“Alibaba had another strong quarter of rapid growth. In particular, annual active consumers increased by 25 million to reach 601 million in the 12 months ended September 30, 2018,” Zhang said.

According to Alibaba’s quarterly results statement, the company’s recent growth has been empowered by the upcoming 11.11 Global Shopping Festival and technological innovations.

“We generated synergies across our business, demonstrating the power of the Alibaba digital economy, which will be further showcased in our upcoming 11.11 Global Shopping Festival,” Zhang said. “Under our New Retail strategy, we are realising our vision to enable renewed growth for traditional retailers through digitising their store-based operations, powered by Alibaba’s technology and consumer insights.”

Over the last three months, Alibaba says it updated the user interface of its Taobao app, enhancing user experience and adding extra value for merchants. As part of the update to its app, the global marketplace customised the shopping experience even more by segmenting users based on shopping behaviour and including more recommendation feeds. This revised user interface also reportedly gives merchants the ability to further target, engage and retain customers.

In addition to updates to its shopping apps, Tmall was able to add a number of flagship stores to its platform, including Stella McCartney, Theory and Sergio Russo. The company’s recent partnership with Richemont, the parent company of luxury brands like Cartier, which will also give Chinese shoppers greater access to global luxury brands, which is expected to prove fruitful in the future.

After a strong quarter, Alibaba says it’s looking forward to its annual 11.11 Global Shopping Festival, with the company launching the tenth anniversary of its sale on November 11.

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