Despite Jack Ma’s conspicuous absence from the state media’s list of tech luminaries, his empire cannot be ignored.
On February 2, Alibaba reported that revenue soared 37 percent year-over-year to $33.89 billion in the quarter ending December 31, besting analysts’ estimates of $33.23 billion. Ma’s tech powerhouse also grew its army of annual active consumers by 22 million to 779 million, boasting higher purchase frequency from all city tiers.
While other companies were hit hard by sweeping store closures, the e-commerce giant has gained from China’s quick recovery and the accelerated shift to online shopping. Not only did its cross-border platform Tmall Global achieve triple-digit growth, but its Singles’ Day Festival saw record-high sales of $74.1 billion from over 250,000 participating brands.
On top of Alibaba’s strong core commerce, the company also reported profitability for its cloud computing business for the first time, boasting an adjusted EBITA (earnings before interest, taxes, and amortization) of $3 million.
“Our cloud computing business continues to expand market leadership and show strong growth, reflecting the massive potential of China’s nascent cloud computing market as well as our years of investment in technology,” CEO Daniel Zhang said in a press release. In a 2018 interview, Zhang told CNBC that cloud computing would be Alibaba’s main business in the future.
This expansion beyond e-commerce may be a necessary change as the company faces antitrust probes and IPO roadblocks from Beijing. In December, China’s State Administration for Market Regulation (SAMR) opened an investigation into Alibaba over monopolistic practices that forced sellers into choosing one of two e-commerce platforms.
A month earlier, regulators abruptly halted Ant Group’s $35 billion IPO after Ma blasted them for taking an outdated approach to financial oversight and stymying innovation. Since then, the billionaire has laid low, rearing his head only to speak at a charity event in January.
Alibaba has said it will cooperate on investigations and develop a rectification plan for Ant Group, but this may not be enough to assuage rattled investors. As China continues to crack down on tech titans and overhaul its internet ecosystem, only one thing remains certain: the days of Alibaba’s unchecked growth are over.