As earnings season continues, the retail sector has yet another busy day ahead. To start the morning off, China’s top e-commerce firm Alibaba Group Holdings Limited (NYSE:$BABA) reported that the company surpassed analysts estimates with a 56% increase in Q1 revenue. Many speculate this increase stems from growth in online sales which make up the majority of its business.
The results were posted on Thursday before the market opened, and they are a clear indication that Alibaba is benefiting from more Chinese buying an increasing proportion of everything from clothing to food.
In 2017, Alibaba’s stock is up by more than 81%, driven by solid increases in revenue for its commerce business and strong growth in its cloud computing and entertainment units.
Here’s What You Need to Know:
– Revenue increased to 50.1 billion yuan, or $7.51 billion, for the three months ended June 30.
– Revenue from the company’s e-commerce business made up 86% of total revenue in the three months to June 30. This is significant as it is up from 73% in the same period in 2016.
– For the cloud business, revenue increased 96% in the quarter to 2.4 billion yuan. Additionally, total paying customers broke the $1 million mark for the first time, up from 577,000 in 2016.
– The cloud business increased its total global data centers to 17 during the first quarter. In addition, Alibaba added two centers in India and Indonesia.
– For the entertainment business, revenue grew by 30% to 4 billion yuan.
– Alibaba’s net income attributable to shareholders almost doubled to $2.17 billion (83 cents per share).
So, what caused this growth? According to chief executive Daniel Zhang: “Our technology is driving significant growth across our business and strengthening our position beyond core commerce.”
Back in June, Alibaba boosted its forecast for 2017 revenue growth to between the range of 45%-49%.
In addition, the company has accelerated the roll-out of its e-commerce infrastructure in Southeast Asia, with an additional $1 billion investment in Lazada Group, a Singapore-based e-commerce platform.
However, aside from surpassing analyst expectations, Alibaba has yet to prove the value of some of its massive investments, such as $2.6 billion in department store chain Intime Retail Group.
Featured Image: twitter
