Alibaba’s Quarterly Revenue Is First to Crest CNY100 Million as Its Users Pass 1 Billion

WANG HAI

(Yicai Global) Jan. 31 — Driven by the development of cloud computing and data technologies, Alibaba Group Holding’s revenue jumped 41 percent to CNY117.3 billion (USD17.5 billion) in the third quarter of fiscal year 2019, which is the fourth quarter of the 2018 calendar year.

It thus becomes the first Chinese internet company to have quarterly revenue exceed CNY100 billion, even as its online payment platform Alipay and affiliates now have more than 1 billion annual active users worldwide.

Hangzhou-based Alibaba’s net profit rose 37 percent to CNY3.4 billion, per its financial results released yesterday.

The firm’s growth stems from the power of its cloud computing and data technologies that are helping millions of companies speed their digital transformation, the group’s chief executive Daniel Zhang said. The number of Chinese middle-class consumers will double within five years, Zhang believes.

During the period, the revenue of Alibaba’s core e-commerce business gained 40 percent to CNY103 billion and its profit, as measured by adjusted EBITA (earnings before interest taxes, depreciation, and amortization) was CNY46 billion in an over 20 percent jump.

Alibaba’s e-commerce unit Taobao’s annual active consumer tally reached 636 million, a net increase of 35 million on the previous quarter and its sixth quarterly growth of over 20 million.

Taobao’s dazzling performance rests on the innovations of countless small and medium-sized businesses, Zhang said, adding “Merchants on the Taobao platform are no longer traditional ones and they use livestreaming to fully interact with consumers. We strongly encourage them to do so.” Merchants’ application of such innovative tools boosts user growth, in his view.

China’s strongly rising consumption stems from young people’s improving spending power, Zhang believes. For example, 46 percent of consumers in last year’s Black Friday-style Tmall Double 11 shopping festival were born in the 1990s. “The younger generation of consumers is still the main force driving China’s consumption growth,” Zhang noted.

Tmall’s Double 11 festival also contributed to the group’s over 100 billion-yuan quarterly revenue. The 10th such event — also known as Singles Day — last year set a new record for turnover of CNY213.5 billion on one day.

Alibaba Cloud’s revenue grew 84 percent to CNY6.6 billion in the period. Its revenue reached CNY21.4 billion last year, passing the CNY20 billion mark for the first time. The figure was CNY11.2 billion in 2017.

Alibaba Cloud’s market share in China is equivalent to the sum of the firms ranking from the second to the ninth, and it has surpassed the cloud business of Google and IBM in the global market, according to Framingham, Massachusetts-based market intelligencer IDC.

About 40 percent of China’s top 500 companies use Alibaba Cloud, as do nearly half of Chinese listed companies, and 80 percent of Chinese technology companies, statistics show.

Cloud computing has always been the focus of Alibaba’s long-term strategy and is also the future as the company’s founder and retiring Executive Director Jack Ma has said repeatedly.

The group has invested more than 43 billion yuan in Alibaba Cloud over the past 10 years and the results are now gradually becoming apparent.

Alibaba shares [NYSE:BABA] closed up 6.34% percent at USD166.82 this morning.

Editor: Ben Armour