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Alibaba Quarterly Revenue Rise 30% Driven By a Continued Rebound in Chinese Consumer Spending

November 6, 2020 11:00 am

Beijing (PingWest)- Chinese e-commerce giant reported 30% rise in revenue to CNY155.06 billion for the fiscal quarter ended 30 September, 2020.

The September quarter revenue exceeded market expectation and it was driven by a continued rebound in Chinese consumer spending after the Covid-19 outbreak was properly controlled by the government.

“Our domestic core commerce business continued to grow steadily during the post-COVID-19 environment in China through higher purchase frequency and consumer spending,” Chief Financial Officer Maggie Wu said in Alibaba’s release.

As the end of September 2020, Alibaba’s domestic retail marketplaces had 881 million mobile monthly active users (MAUs), increased from 757 million a year earlier as the company’s services further penetrated into less developed areas. Accordingly, the Alibaba’s core commerce revenue rose to CNY130.92 billion from CNY101.22 billion a year earlier;

Tmall online physical goods GMV, excluding unpaid orders, rose 21% year-over-year during the September 2020 quarter. Fast-moving consumer goods (FMCG) continued to be the fastest growing Tmall category, primarily driven by the strength of food and beverage, healthcare, beauty and personal care. While, Tmall Global, a premier section that covers a wide range of international brands, saws the number of brands and merchants on the platform grew at double-digit rate year-over-year.

With the introduction of innovations and news features, the participation of consumer and brand for this year Alibaba’s 11.11 Global Shopping Festival will be highest up to date.

About 800 million consumers are expected to participate in this year’s 11.11, and the number of new products debuting on Alibaba’s B2C platform Tmall will exceed 2 million. This is more than doubled than the number of new products from last year, said Alibaba.

Unlike in previous years, the shopping festival will have two sale period from November 1 to 3 and Nov.11. According to Alibaba, the idea behind the creation of two sales windows instead of a singe large shopping day (11.11) is that the new concept so called “Double” will enable merchants to double up on promoting their products to consumer not just once, giving new brands and small businesses opportunities to participate in the extended festival.

Revenues from the tech group's burgeoning cloud business rose 60% to CNY27.24 billion, primarily driven by growth in revenues from customers in the Internet, finance and retail industries.

Alibaba expects that it will soon turn cloud business to be profitable despite the business is still running at a loss.

“Our cloud computing revenue grew 60% year-over year,driven by the acceleration in digitalization across all industries and businesses of all sizes in China. We are happy to see that our strategic investments are starting to see improving operational efficiencies and the effect of scale,” Alibaba’s Chief Financial Officer Maggie Wu said

In April, Alibaba’s Cloud unit said it would invest CNY200 billion in its cloud infrastructure over the next three years, the money will be used to invest in data center infrastructure and technologies including operating systems, servers, chips and networks.

At present, Alibaba Cloud has 63 availability zones, located in Asia, Australia, the Middle East, Europe and the United States.

The net profit fell 60% to CNY28.8 billion from a year earlier as Alibaba booked a massive gain on its stake in Ant Group while it executed employee stock options on Ant stake this year, so this huge gain and extra costs for employee stock options dragged down operating profit

Alibaba is continuing to expand into other sector to keep growth momentum. In October, Alibaba has aligned with swiss duty free group Dufry to explore the potentials of China’s domestic and inbound travel consumption after Covid-19 outbreak hitting China outbound travel market.