Alibaba Group has reported on a strong financial quarter, following the news of a new cloud-computing platform that will increase its hold on the Indian e-commerce market.
Chinese tech giant Alibaba Group has announced its financial results for the second quarter of 2018, revealing 61% revenue growth and a quarterly income of US$12,229 million.
Year-over-year growth has been strong across multiple revenue streams. The company reports a 61% increase in core commerce, bringing in US$10,456 million; a 46% increase in digital media and entertainment, with US$903 million; and a 64% rise in innovation initiatives and others, totalling US$160 million.
The results also reveal notable decreases, with a 54% fall in income from operations and a 45% decline in net income. However, the company attributes this to “a one-time increase in share-based compensation expense” and says that operation income and net income would have been up 9% and 33% without this increase skewing the numbers.
Overall, then, it has been a strong Q2 for Alibaba, cementing a strong year.
“The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validates our strategy of investing in customer experience, product, technology and infrastructure for the future,” said Maggie Wu, Chief Financial Officer of Alibaba Group. “We remain confident in our ability to continue to gain market leadership by delivering unique value propositions to our business customers, partners and consumers.”
One example of this growth is Alibaba Cloud, the company’s cloud-computing business, expanding into India. The Q2 results come after last week’s announcement that Alibaba is partnering with Indian digital payment firm Paytm to launch a platform powered by artificial intelligence. Though the two companies already have an established relationship, this new partnership reflects Alibaba’s commitment to becoming a significant player in the Indian e-commerce market.
Paytm AI Cloud will provide businesses in India, including startups and developers, with apps to improve workflow, automation, payment options, and customer engagement. Given that Alibaba Cloud opened its first Indian data centre in Mumbai just this year, the partnership suggests a successful ongoing expansion. While major competitor Amazon still dominates the Indian market, Alibaba is becoming a serious contender.
The company’s earnings reflect this global growth. Alibaba Cloud’s revenue from Q2 2018 is US$710 million, up 93% from Q2 2017. The financial results report that this increase was “driven by both revenue mix towards higher value-added products and services and robust growth in paying customers.”
“We are executing our plan of providing more value and choice to users along the consumption continuum, with digital entertainment and local service offerings that tap into big addressable markets beyond core commerce,” said Daniel Zhang, Chief Executive Officer of Alibaba Group. “We will continue to invest in strategic business opportunities and innovation to sustain our competitive advantage and for longterm growth.”