BEIJING (REUTERS) - Alibaba, China's top e-commerce firm, beat analysts' estimates with a 56 per cent rise in first-quarter revenue, driven by growth in online sales which make up most of its business.
Thursday's (Aug 17) results show that Alibaba Group Holding, one of Asia's most valuable companies, is benefiting from more and more Chinese buying an increasing proportion of everything from food to clothing to luxury items online.
Alibaba's stock is up by over 81 per cent this year, lifted by steady increases in revenue from its e-commerce business, and strong growth in its cloud computing and entertainment units, even as investments in offline stores are yet to pay off.
Alibaba's revenue rose to 50.1 billion yuan (S$10.24 billion) for the three months ended June 30, compared with analysts' average estimate of 47.7 billion yuan, according to Thomson Reuters I/B/E/S. "Our technology is driving significant growth across our business and strengthening our position beyond core commerce,"chief executive Daniel Zhang said in a statement.
Revenue from Alibaba's core e-commerce business made up 86 per cent of total revenue in the three months to June 30, up from 73 per cent in the same period a year prior.
In the cloud business, revenue grew 96 per cent in the quarter to 2.4 billion yuan, with total paying customers breaking the one million mark for the first time, up from 577,000 a year earlier. Alibaba's cloud business boosted its total global data centres to 17 during the first quarter, with the addition of two centres in India and Indonesia.
Revenue in the entertainment business rose by 30 per cent to 4 billion yuan.
Net income attributable to the company's shareholders nearly doubled to US$2.17 billion, or 83 US cents per share.
Shares of Chinese e-commerce firms, including Alibaba.com and JD.com Inc, have outperformed the market in 2017, buoyed by positive revenue growth around June sales events and overseas expansion developments.
In June, Alibaba raised its expectations for full-year revenue growth to between 45 per cent and 49 per cent.
It has accelerated the roll-out of its e-commerce infrastructure in South-east Asia, with a further US$1 billion (S$1.36 billion) investment in Singapore-based e-commerce platform Lazada Group, and targeted new merchants in Russia and the United States as part of a wider plan to boost revenues and attract new customers outside of China.
Alibaba, though, is yet to prove the value of several recent large-scale investments, including US$2.6 billion in department store chain Intime Retail Group, among other bricks-and-mortar investments.