​Chinese retail business boosts Alibaba total revenue by 23 percent

Alibaba achieved total revenue of 77 billion yuan during the nine months to December 31, 2015, attributing the increase to its Chinese commerce retail business.
Written by Aimee Chanthadavong, Contributor

Alibaba Group has reported a 23 percent increase in total revenue year-over-year to the nine months ended December 31, 2015, attributing the result to the continued rapid growth of its China commerce retail business.

The company said it achieved 77 billion yuan (AU$16.5 billion) for the period, up from 58.8 million yuan reported over the same nine month period in 2014. Net income for the same period came in at 66 billion yuan, a significant 68 percent lift from 2014 when it achieved 21 billion yuan.

During the nine months, the company's China commerce business achieved revenue of 64.9 billion yuan, an increase from the 49 billion yuan reported for the same period in 2014.

For the quarter ended December 31, 2015, total revenue increased 32 percent year-over-year, coming in at 34.5 billion yuan, with its China retail marketplace revenue increasing 35 percent year-over-year to 28.7 billion yuan, while mobile revenue skyrocketed 192 percent year-over-year to 18.7 billion yuan.

According to Alibaba, revenue from its China commerce retail business increased at a higher rate than gross merchandise volume (GMV) growth on its China retail marketplaces because of the increase in online marketing services revenue. GMV increased 23 percent year-over-year to 964 million yuan, with mobile GMV accounting for 68 percent of total GMV.

The Chinese company also reported annual active buyers on its China retail marketplaces increased by 21 million from the prior quarter to 407 million, while mobile monthly active users in December reached 393 million, an increase of 47 million from the previous quarter.

Alibaba CEO Daniel Zhang said reaching a milestone of over 400 million active buyers is evidence of the company's ability to attract, engage, and retain buyers to drive future company growth.

"We remain focused on our top strategic priorities, including global imports, rural expansion, increasing our footprint in first-tier Chinese cities and building a world-class cloud computing business," he said.

Alibaba's cloud computing and internet infrastructure business also continued to experience rapid growth, with revenue increasing 126 percent year-over-year to 819 million yuan. The company said the growth was primarily due to an increase in the number of paying customers, and their usage of a greater range of Alibaba's offers such as content delivery network and database services.

Last July, the company set aside $1 billion to grow its cloud business Aliyun, including growing its partner ecosystem, investing in new datacentres, and developing new cloud and big data products.

Following that announcement, Aliyun unveiled DT PAI, something the company touted as "China's first artificial intelligence platform" to help developers analyse large volumes of data.

Alibaba added that its local joint venture recently established with Ant Financial, Koubei, gained momentum during the quarter, generating 15.8 billion yuan in GMV transacted, with daily transactions averaging more than 5 million in December.

The company has also been focusing on its globalisation strategy by helping international brands and retailers sell online to Chinese consumers. During the quarter, Australian retail giant Woolworths signed a deal with Hong Kong-based ecommerce technology provider eCargo to help build and manage a storefront on Alibaba's Tmall. Coca-Cola, Starbucks, Lululemon, and Clarisonic also opened up in Tmall during the quarter.

In September, Alibaba hit back on reports by Barron that warned the company's stock would plunge by 50 percent, saying the claims were unverifiable. In its retort, Alibaba said the report lacked "integrity, professionalism, and fair play", pointing out the forecast was based on incorrect calculations, for instance, comparing Alibaba's stock performance to eBay's when the latter did not have operations in China.

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