Fashion
The Chinese e-commerce giant Alibaba has reported a stronger than expected 32% rise in second-quarter revenue, even as the value of transactions on its platforms grew at a slower pace.
Revenue from mobile platforms, an increasingly important area for the company, nearly tripled to $1.66bn (£1.1bn), with mobile gross merchandise volume (GMV) accounting for 62% of total transactions on Alibaba’s China retail marketplaces.
“Mobile is the trend and Alibaba is capturing that trend,” said Tian Hou, an analyst at TH Capital Research.
Alibaba’s New York-listed shares were up 10% in premarket trading. Shares of Yahoo, which owns 15% of Alibaba, were up 7%. The total value of transactions on Alibaba’s retail marketplaces in China rose 28% to $112bn, but this was the slowest growth in more than three years.
The lower GMV growth was not unexpected. In early September, Jane Penner, Alibaba’s head of investor relations, said the total value of transactions during the quarter would be smaller than originally expected due to lower order values. Revenue rose to $3.49bn in the three months to the end of September.
The jump in revenue added weight to recent comments from Jack Ma, Alibaba’s founder and chairman, that concerns about slowing consumption in China were overdone.
The earnings report comes about two weeks before Alibaba’s singles day shopping festival on 11 November, which last year netted sales of more than $9bn .
The company reported net income attributable to shareholders of $3.58bn, or $1.40 per share. Alibaba earned 57 cents per share, beating the average estimate of 54 cents.
Alibaba, facing increasing competition from its rival JD.com, has been branching out from its core online shopping platforms in an attempt to stem a slowdown in revenue growth. During the quarter, the company invested $4.6bn in Suning Commerce Group in a move to bolster its ability to compete in logistics and electronics – two areas of strength for JD.com.
The company has also poured more money into ventures outside China, for example by investing in One97 Communications, the parent of the Indian online retailer Paytm, and taking part in a funding round for the Indian e-commerce company Snapdeal.com.
Alibaba shares closed at $76.35 on Monday, down about 36% from their record high of $120 in November 2014. Yahoo closed at $33.40.
