Mobile sales boost Alibaba's 2Q earnings

China's e-commerce giant reports a 32 percent increase in revenue to $3.49 billion, with mobile sales on its retail marketplaces accounting for 62 percent of overall gross merchandise volume.
Written by Eileen Yu, Senior Contributing Editor

Alibaba Group has reported a 32 percent increase in revenue for its second quarter to $3.49 billion or 22.17 billion yuan, fueled by stronger mobile sales on its e-commerce platforms.

Earnings per share grew 30 percent over the previous year to 57 cents, beating Wall Street expectations of 29 cents on revenue of $3.39 billion.

The China-based e-commerce giant clocked $112 billion (713 billion yuan) in gross merchandise volume (GMV) from its retail marketplaces in the country, namely, Taobao and Tmall. This figure, which refers to the total value of goods transacted on its online platforms, represented a 28 percent climb from the same quarter last year, according to Alibaba.

Mobile sales contributed 62 percent of overall GMV, generating $1.66 billion (10.52 billion yuan) in revenue for the quarter, ended September 30. This was a 183 percent year-on-year increase.

The number of active buyers on its retail marketplaces grew 26 percent over the same quarter 2014 to 386 million, while mobile monthly active users increased 59 percent to 346 million.

The Chinese company pointed to efforts in introducing same-day delivery for groceries in major cities, such as Chengdu and Hangzhou, as well as growing its presence in lower-tier cities and rural areas. It currently delivers to more than 4,000 rural villages.

Alibaba CEO Daniel Zhang said: "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.

"We are winning in mobile and remain focused on our top strategic priorities, including internationalisation, expanding our ecosystem from cities to villages, and building a world-class cloud computing business," Zhang said.

Alibaba's cloud and internet infrastructure business reported a 128 percent year-on-year increase in revenue to $102 million (649 million yuan).

It recently set up a datacentre in Singapore, where it also established its international headquarters to drive the company's global expansion plans.

Part of its globalisation strategy included emphasis on cross-border commerce, Alibaba said, in which its China marketplaces served as a gateway for international brands and retailers to peddle their wares to Chinese online consumers. The e-commerce operator this year opened new offices in London and Milan to support European brands and retailers.

"We will continue to expand our customer base, geographic coverage and product offerings. We are positive about the development of the cloud computing business as more customers look for computing solutions at a reasonable cost and sophistication in managing their increasingly complex IT infrastructures.

Alibaba CFO Maggie Wu added that the company's free cash flow clocked in at $2.14 billion for the quarter.

In August 2015, its board of directors authorised a share buyback scheme of up to $4 billion over two years, as its stock price tumbled alongside China stock market crashes. Alibaba said 40.8 million shares had been "repurchased and cancelled" for $2.74 billion during the second quarter.

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