Alibaba Group beats expectations, revenue up 51% on cloud boost

by Apparel Resources News-Desk

16-May-2019  |  2 mins read

Alibaba
Image Courtesy: asiatimes.com

Business is as usual for Chinese e-commerce Alibaba as it bounced back from a lacklustre Q3 and beat its fourth-quarter revenue forecasts.

For Q4, the company saw a new revenue surge of 51 per cent year-on-year to reach 93.50 billion yuan (US $ 13.6 billion), beating estimates of 91.58 billion yuan, thanks to its core business and its diversification into cloud computing and other services.

Sales excluding revenue from consolidated businesses grew by 39 per cent year-on-year.

The firm expects its revenue for the full fiscal year ending in March 2020 to exceed 500 billion yuan, which would be a 33 per cent increase on the previous year.

Alibaba’s shares were up 1.7 per cent at US $ 177.55 in New York trade after the release of its fourth-quarter results.

Alibaba has invested in new business lines such as cloud computing as a boom in its core e-commerce has peaked and its top line growth is slowing.

The online major has made money primarily by selling advertising and promotional services to third-party merchants that list products on Taobao and Tmall, two of its e-commerce sites.

It also opened 135 supermarkets in China under its Hema division, according to its earnings release. Cloud computing business brought in more revenue to the company as a result of which it rose up to 70 per cent in the fourth quarter.

The company is now the world’s third largest cloud service provider, after Microsoft Corp. and Amazon.com Inc., and the largest in China with a market share of over 40 per cent, according to IDC.

Daniel Zhang, CEO, Alibaba Group, said that the impressive results were because of improved conversion rates – thanks to a new app interface featuring more recommendations and video content, an increase in retailer product launches and general user/shopper growth.

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