With its mammoth Singles Day sales event still to come later this month, Chinese e-commerce kingpin Alibaba on Wednesday reported quarterly revenue of RMB 34,292 million (US $6.14 billion), up 55% from the year-ago period and surpassing Thomson Reuters consensus expectations for revenue of RMB 34,020 million.
E-commerce revenue in the period increased 41% year-over-year to RMB 28,493 million (US $4,273 million). Mobile monthly active users on its China retail marketplaces reached 450 million in September, an increase of 23 million over June, while annual active buyers on its China retail marketplaces reached 439 million, an increase of 5 million from the 12-month period ended in June.
Meanwhile, Singapore-based e-commerce startup Lazada Group, of which Alibaba Group has a controlling stake, will acquire Singapore online grocer RedMart Ltd. for about $50 million as part of its expansion effort in Southeast Asia, The Wall Street Journal reports.
Despite its already significant scale, Alibaba continues to grow rapidly, thanks in part to its acquisitions of Chinese video site Youku Tudou and e-commerce business Lazada. Much like Amazon, the e-marketplace's success this quarter was tethered by strong support from its cloud computing operations, which increased 130% year-over-year to RMB1,493 million (US $224 million).
“Beyond the strong performance of our core commerce business, we are pleased with the continued rapid growth of our cloud computing business," Alibaba Group CEO Daniel Zhang said in a statement. "We also see huge potential in our newly integrated digital media and entertainment unit. By combining engaging online experiences with highly relevant content, we delivered impressive financial and operational results in the quarter across the company.”
The company said it will continue with acquisitions that it believes will contribute to its growth, and Alibaba Group executive vice chairman Joe Tsai told investors that Alibaba’s patience with such companies will eventually pay off, according to a description of a conference call with analysts emailed to Retail Dive by Alibaba spokesperson Erica Matthews. Alibaba’s investment in Lazada, and Lazada’s reported acquisition of RedMart, is part and parcel of that strategy.
“The investment cycle for incubating businesses that eventually become massive value drivers can take seven to 10 years,” Matthews said. “This is a pattern that was repeated with Taobao, Alipay and Alibaba Cloud, all of which were developed organically in-house. We believe Alibaba’s ability to remain patient and invest with a long-term view is a huge competitive advantage.”
The conglomerate’s strong quarterly results come just ahead of its blockbuster Singles Day event. While the online shopping bonanza won't take place until Nov. 11, the e-commerce goliath rolled out deals three weeks early, much in the same way that retailers like Amazon have launched early Black Friday promotions well ahead of the holiday.