Dive Brief:
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Chinese e-commerce giant Alibaba on Tuesday reported that Q3 revenue surged 54% to RMB53,248 million ($7.7 billion), thanks in large part to its blockbuster Nov. 11 Singles Day event, which alone logged some $17.8 billion in sales (up 32% from last year), according to a company press release.
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Q3 revenue from Alibaba’s Chinese commerce retail business was RMB40,802 million (US$5.9 million), or 77% of total revenue, an increase of 42% compared to RMB28,714 million in the same quarter of 2015, the company said.
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The company’s marketplaces boasted 493 million monthly users and 443 million active buyers as of December 2016. Taobao, which in December was added to the U.S. Trade Representative’s Notorious Markets list for its plethora of fake goods, swelled to 493 million monthly users in December from 450 million in September.
Dive Insight:
Alibaba has acquired a series of retail ventures to boost its operations in Southeast Asia and elsewhere, though its third-quarter fortunes were closely tied to the Chinese consumer. Like Amazon, much of Alibaba's strength comes from its rich sources of data about its customers and their behavior.
“We believe that this trajectory of developing a social experience is one that Alibaba will further exploit over the course of this calendar year and beyond,” Håkon Helgesen, retail analyst at research agency and consulting firm Conlumino, said in a note emailed to Retail Dive, adding that Alibaba remains a “solid, and highly disruptive, retailer.”
Helgesen also said the company's hiring of sociologists to understand consumer behavior will help create a more immersive experience for shoppers. Alibaba's technological bent will also increase expansion into brick-and-mortar operations, Helgesen said. "[L]ike Amazon, Alibaba does not just want to play in the physical space – it wants to reinvent the shopping experience by using data and technology," he said.
In his conference call with analysts, Alibaba CEO Daniel Zhang referred to its investment in Sanjiang Shopping Club and its offer on Intime Retail Group as "highly strategic in purpose," according to an email from Alibaba to Retail Dive.
"Alibaba has coined the term 'New Retail' to describe a world where the distinction between online and offline commerce becomes obsolete," according to the company statement. "We believe 'New Retail' will result in new value creation from the integration of traditional retail with mobile Internet innovation. Relationships among the consumer, merchandise and retail space will be restructured to offer a better value propositions to consumers as well as enhanced operating efficiency for merchants."
The company exceeded analyst expectations with its third-quarter report. “While Alibaba’s revenue numbers are flattered by the integration of the Lazada business, this was, nonetheless, another robust quarter for the online giant, and one that exceeded initial forecasts,” according to Helgesen. “All parts of the business pulled their weight, although the international division stormed ahead with stellar growth of 288% over the prior year.”