Fashion
Despite its already significant scale, Alibaba continues to grow rapidly, thanks in part to its acquisitions of Chinese video site Youku Tudou and e-commerce business Lazada. Much like Amazon, the e-marketplace’s success this quarter was tethered by strong support from its cloud computing operations, which increased 130% year-over-year to RMB1,493 million (US $224 million).
“Beyond the strong performance of our core commerce business, we are pleased with the continued rapid growth of our cloud computing business,” Alibaba Group CEO Daniel Zhang said in a statement. “We also see huge potential in our newly integrated digital media and entertainment unit. By combining engaging online experiences with highly relevant content, we delivered impressive financial and operational results in the quarter across the company.”
The company said it will continue with acquisitions that it believes will contribute to its growth, and Alibaba Group executive vice chairman Joe Tsai told investors that Alibaba’s patience with such companies will eventually pay off, according to Alibaba spokesperson Erica Matthews. Alibaba’s investment in Lazada, and Lazada’s reported acquisition of RedMart, is part and parcel of that strategy.
“The investment cycle for incubating businesses that eventually become massive value drivers can take seven to 10 years,” Matthews said. “This is a pattern that was repeated with Taobao, Alipay and Alibaba Cloud, all of which were developed organically in-house. We believe Alibaba’s ability to remain patient and invest with a long-term view is a huge competitive advantage.”
The conglomerate’s strong quarterly results come just ahead of its blockbuster Singles Day event. While the online shopping bonanza won’t take place until Nov. 11, the e-commerce goliath rolled out deals three weeks early, much in the same way that retailers like Amazon have launched early Black Friday promotions well ahead of the holiday.
