BEIJING • 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.
Yesterday's results show the firm, one of Asia's most valuable companies, is benefiting from more Chinese buying an increasing proportion of everything from food to clothing to luxury items online.
Alibaba's stock is up by more than 81 per cent this year, lifted by steady increases in revenue for its commerce business and strong growth in its cloud computing and entertainment units, even as investments in offline stores are yet to pay off.
Revenue rose 56 per cent to 50.2 billion yuan (S$10.3 billion) in the three months ending June, the firm said.
It reported non-GAAP diluted earnings per share of US$1.17, versus the 94 US cents projected.
Shares of Alibaba rose 5 per cent in pre-market trade in New York. The stock has gained 82 per cent this year, compared with a 7.3 per cent gain for the NYSE Composite Index.
The company reported a 58 per cent rise in its core commerce operations to 43 billion yuan, while cloud revenue almost doubled to 2.4 billion yuan as the number of paying customers for the business surpassed one million. The media division, which runs a Netflix-like streaming service, among other businesses, grew sales by 30 per cent.
But Alibaba's biggest investments of late have been in brick-and-mortar retail. Billionaire owner Jack Ma has ventured into traditional retail, a sector he wants to revamp via experiments like HeMa Supermarket, a fresh-food store that also provides online grocery delivery.
The company is betting data and cloud technology can change the way brands monitor inventory and enable them to ship goods based on real-time demand while also rendering multiple layers of middlemen redundant. The showcase for that effort is HeMa, which mashes three functions - groceries, dining and delivery. Customers can buy items such as lobster, get house chefs to cook it, and also have items delivered. Shoppers gets recommendations for products they might be interested in by scanning bar codes via the HeMa app, and pay with their digital wallet Alipay.
"Alibaba Group is the best way to play the Chinese consumer theme," said Mr Mitchell Green, managing partner at Lead Edge Capital, an Alibaba investor. "Chinese people will spend a lot more on consumer goods in a decade than they do today."