Alibaba Group, the parent company behind Taobao and Tmall, announced its financial results on Friday for the quarter and fiscal year ending on March 31. The company achieved $1 trillion in annual gross merchandising value for the first time, and it also reported that its overall revenue from the March quarter rose by 22 percent to 114.3 billion yuan ($16.1 billion).
For Tmall, sales slumps in major categories like apparel and accessories were offset by a rise in sales of daily necessities, according to a report by Alibaba without further details. The e-commerce giant’s Core Commerce segment, which houses Taobao, Tmall, Tmall Global, and the high-end shopping mall brand Intime, constituted 82 percent of its quarterly revenue of 13.2 billion yuan ($1.85 billion), and it holds entry to over 726 million annual active consumers in China.
Despite having been impacted by the COVID-19 pandemic, the company is still on track for further growth, its executives said. The chief financial officer of Alibaba Group, Maggie Wu, said that they’ve seen “a steady recovery” since March, and the group expects to generate over 650 billion yuan ($91.1 billion) in revenue by the end of the 2021 fiscal year.
For apparel and accessories retailers, the weak performance by Tmall during the national lockdown shows how important the online-to-offline (O2O) model has become and why new online opportunities like livestreaming aren’t going to be catch-all solutions. For this business sector, the group listed Taobao Live as its big growth opportunity during its investor presentation today, since it saw an 88-percent rise in merchants who were selling daily during the March quarter.
As Alibaba’s chairman and chief executive officer, Daniel Zhang, said: “The pandemic has fundamentally altered consumer behavior and enterprise operations, making digital adoption and transformation a necessity.” And now that Alibaba has begun work on its stated vision for 2036, “Serve two billion global consumers,” it would be wise for retailers that want to sell in China to get on board.
The Jing Take reports on a leading piece of news while presenting our editorial team’s analysis of its key implications for the luxury industry. In this recurring column, we analyze everything from product drops and mergers to heated debates that sprout up on Chinese social media.