Alibaba’s Q3 sales grow 23% and profits double

Alibaba reported consumers bought 964 billion yuan ($149 billion) worth of goods on its Chinese online marketplaces in the quarter ended Dec. 31, an increase of 23% from the gross merchandise value, or GMV, of sales in the same quarter of 2014. Shoppers made 68% of those purchases on mobile devices.

The value of purchases on Alibaba’s China marketplaces during the 12 months ended Dec. 31 totaled just under $449 billion, well above anticipated U.S. e-retail volume for 2015 of around $350 billion. Alibaba’s China sites accounted for about 76% of the $589 billion in China 2015 online retail purchases reported recently by China’s National Bureau of Statistics.

“We had excellent results this quarter. We achieved impressive revenue growth as we are increasingly monetizing the user activity on our marketplaces, particularly on mobile devices. In this quarter, revenue grew 32% year over year and China retail marketplace revenue grew 35% year-over-year,” says Maggie Wu, chief financial officer of Alibaba Group. “Meanwhile, we generated strong free cash flow of US$3.7 billion this quarter. The fundamental strength of our core business gives us the confidence to invest in our strategic priorities.”

Alibaba attributes the growth mainly to more consumers shopping its online shopping sites. Alibaba said active buyers, those who purchased in the past year, increased to 407 million in this quarter, a 22% increase from 334 million a year ago. Mobile active users who shop every month in December reached 393 million, up 48% from the prior-year period.

While Alibaba derives most of its revenue from its big China web marketplaces—Taobao, Tmall and Juhuasuan—it also reported growth in international ventures.

One of those is the Tmall Global marketplace, launched last year to allow foreign companies without a business license in China to sell online to Chinese consumers. Sales on Tmall Global increased 179% in the recent quarter, though Alibaba did not report the actual sales. Plus, more foreign companies that have obtained China business licenses opened branded stores on the main Tmall.com site. Among the more than 200 international brands opening flagship stores on Tmall during the quarter were Coca-Cola, Starbucks and Lululemon, Alibaba says.

Alibaba also sells to online shoppers around the world through its AliExpress.com retail marketplace. Revenue from selling products to overseas consumers, mainly on Alixpress.com, totaled 632 million yuan ($97 million) in the quarter, an increase of 14% from 554 million yuan in the same quarter of 2014.