Alibaba posts 54 per cent quarterly revenue growth ahead of Singles’ Day shopping festival

Alibaba Group Holding said its fiscal second-quarter revenue surged 54 per cent, powered by its core commerce and cloud computing business, even as it decided to forgo monetising from new features to help its merchants amid “fluid macro-economic conditions”.

The New York-listed e-commerce giant’s revenue reached 85.1 billion yuan (US$12.4 billion) in the quarter ended September 30, up from 55.1 billion yuan in the same period last year, according to a statement. Net income increased 13 per cent to 20 billion yuan. A recent decision not to monetise new features to increase customer engagement and product discovery in the Taobao app meant the company lowered its full-year revenue guidance by 4 to 6 per cent to 375 billion yuan to 383 billion yuan.

Alibaba’s results are seen by many investors as a proxy for consumer spending in China and important indicator of its economic health. The company will hold its 10th annual Singles’ Day shopping promotion on November 11 and expects to achieve a record 1 billion orders in 24 hours, as this month’s festival will see the participation of more merchants and consumers outside China.

“Alibaba had another strong quarter of rapid growth. In particular, annual active consumers increased by 25 million to reach 601 million in the 12 months ended September 30, 2018,” Alibaba chief executive Daniel Zhang Yong said in a statement.

“We generated synergies across our businesses, demonstrating the power of the Alibaba digital economy, which will be further showcased during our upcoming 11.11 Global Shopping Festival. Under our New Retail strategy, we are realising our vision to enable renewed growth for traditional retailers through digitising their store-based operations, powered by Alibaba’s technology and consumer insights.”