Today saw China’s tech giant Alibaba Group surge past its competitors with a reported 61 percent rise in second-quarter revenue. In the group’s official financial announcement, revenue reached 80.92 billion RMB ($12.2 billion), marginally beating Bloomberg’s estimate of 80.88 billion RMB. Stocks for Alibaba opened today at $184.97, up 3.49 percent on last night’s close of $177.85.
Alibaba’s net income actually fell sharply for the quarter ending June 30 however, to 8.7 billion yuan ($1.27 billion), down from 14.7 billion yuan in the same quarter the previous year. That was largely associated with a one-time charge for setting up an online groceries division.
Alibaba’s established e-commerce platforms Taobao and Tmall accounted for the majority of its business, at around 86 percent of Alibaba Group’s total revenue. These core commerce revenues amounted to $10.07 billion dollars (69.19 billion RMB), just below analyst expectations of $10.25 billion dollars (70.49 billion RMB) according to CNBC.
Tmall’s GMV (gross merchandise value) reported a 34 percent year-on-year growth.
Of particular note, according to Alibaba, were luxury brands MCM, Moschino and Giuseppe Zanotti, who all launched flagship stores on Tmall this quarter. In recent months, Alibaba has been pushing forward with its online to offline New Retail strategy, in an attempt to attract more premium brands to Tmall’s Luxury Pavilion shopping platform.
Annual active consumers on Alibaba’s China retail marketplaces reached 576 million, an increase of 24 million from the 12-month period ended March 31. Mobile monthly average users on the platforms China marketplaces reached a huge 634 million in June 2018, an increase of 17 million in just three months.
Despite trade tensions between the U.S and China causing the yuan to weaken since April, Alibaba’s results have demonstrated the company’s unwavering position as market leader. Last week saw one of Alibaba’s biggest rivals, Tencent, report a 2 percent drop in sales revenue – the first company’s decline in nearly 13 years.
In a press release to investors, Maggie Wu, Chief Financial Officer of Alibaba Group, said, “We are pleased with the strength and rapid growth of our business at such significant scale. The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validate our strategy of investing in customer experience, product, technology, and infrastructure for the future. We remain confident in our ability to continue to gain market leadership by delivering unique value propositions to our business customers, partners and consumers.”