Alibaba profits triple as world’s biggest ecommerce business flies
Profits almost tripled last year at the world’s biggest e-commerce company, Alibaba. The Chinese firm, which handles more transactions than Amazon and eBay combined, reported a net income of 71bn yuan ($11bn; £7.6bn) for the year to 31 March, up 193% on the previous year.
Sales rose by a third to 101bn yuan, with sales on mobile devices up 182%. “Alibaba Group finished the fiscal year on a very strong note,” said chief executive Daniel Zhang.
“Whatever they are doing must be working, and most importantly it’s a sign that the Chinese consumer may not be weakening quite yet,” said Gil Luria of Wedbush Securities.
Despite the strong rise in sales, the company has struggled to reach the growth levels it recorded before it became a public company two years ago.
It faces strong competition from local rival websites like Baidu, Tencent and JD.com. Shares have also lost more than a third of their value since the company held its record initial public offering in 2014.
The company’s original business was Alibaba.com, set up by the company’s colourful founder, Jack Ma, in 1999. It helps to connect exporters in China (and other countries) with companies in over 190 countries around the world.
The business now includes entertainment services, including China’s version of YouTube, Youku Tudou, as well as payment systems and cloud computing and logistics services.
Increasingly, Mr Ma is looking to counter the company’s reliance on Chinese consumers, with the firm now looking to get up to half of its sales from abroad.
Among recent deals to expand was the purchase of South East Asia e-commerce start-up Lazada and Hong Kong’s well-respected English language, the South China Morning Post.
Another area of potential growth investors are excited about is its payment platform Alipay.
Alipay is operated by affiliate Zhejiang Ant Small & Micro Financial Services Group, also known as Ant Financial.
Mr Ma controls Ant, which is China’s biggest online financial services firm, and is said to be worth around $60bn following its latest fundraising round.