Alibaba 1Q revenue climbs 59 percent to $4.84B

Fuelled by growth across several businesses including mobile, e-commerce, and cloud, Alibaba's revenue for the June quarter hits 32.15 million yuan (US$4.84 billion).
Written by Eileen Yu, Senior Contributing Editor

Alibaba has reported a 59 percent year-on-year revenue growth for its first quarter, ended June 30, clocking 32.15 billion yuan (US$4.84 billion) and beating analyst forecast of 30.17 billion yuan.

Net income for the quarter, though, dipped 77 percent to 7.14 billion yuan (US$1.08 billion), from 30.82 billion yuan the year before. The Chinese vendor pointed to a one-time disposal gain from the deconsolidation of Alibaba Pictures as the main reason for the significant decrease in net income.

Its China retail marketplaces generated revenue totalling 23.38 billion yuan (US$3.52 billion), up 49 percent from the previous year. Mobile revenue grew 119 percent to 17.51 billion yuan (US$2.64 billion) and accounted for 75 percent of the company's total domestic retail marketplaces intake.

Its marketplaces pushed gross merchandise volume (GMV) worth 837 billion yuan (US$126 billion), up 24 percent year-on-year, with mobile accounting for 75 percent. Mobile monthly active users (MAUs) in June grew 17 million from March to hit 427 million, Alibaba reported, adding that annual active buyers on its China retail marketplaces climbed 11 million from the previous quarter to 434 million in June.

Alibaba Group CFO Maggie Wu revealed that the company for the first time saw higher monetisation of its mobile users than non-mobile users, attributing the growth to its focus on mobile.

The Chinese vendor's cloud business also saw higher revenues this quarter, growing 156 percent year-on-year to reach 1.24 billion yuan (US$187 million) on adjusted EBITA loss of 158 million yuan (US$24 million), down from 348 million yuan the year before.

Last year, it announced plans to invest US$1 billion to drive its cloud business, Aliyun, and this year expanded its data centre operations in Singapore with a second cloud availability zone. It also established a joint venture cloud company with Japan's Softbank, offering Aliyun's products and services to the Japanese market.

To further bolster its footprint outside of its domestic market, Alibaba in April acquired a controlling stake in Southeast Asian e-commerce operator, Lazada Group, for US$1 billion. The Chinese vendor said the deal would help existing merchants and brands on its e-commerce platforms reach the region's consumer market.

eMarketer analyst Andria Cheng said in a note earlier this week: "Increased mobile shopping and rural market demand will continue to drive Alibaba's China e-commerce sales growth. On the international front, Alibaba's...investment in Lazada will give it access to rising middle class consumers in key Southeast Asian markets and further its goal to drive growth outside of China."

While cross-border e-commerce was a key growth opportunity, Cheng noted that Alibaba would need to demonstrate it was serious about fighting counterfeit product sales on its sites, in particular, on the Taobao consumer-to-consumer platform.

The analyst added that Alibaba was looking to expand its business into media and entertainment, mobile payment, and cloud to build a wider ecosystem of e-commerce and services aimed at keeping consumers on its platforms.

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