Alibaba Continues Steady Growth, Stabilized by E-Commerce

Chinese online retailer Alibaba has just reported a 56 percent increase in US revenue—nearly $23 billion—in the fiscal year 2017 (ending March 31). Fueled mostly by strong cloud computing growth and, of course, its core e-commerce business, Alibaba continues to beat profit growth expectations. However, the company’s positive results still fell a little short of expectations.

According to Alibaba CEO Danial Zhang, “Our core commerce segment continued its significant growth and strong cash flow at large scale, enabling our aggressive investment in cloud computing, digital media and entertainment to drive the digital transformation of the economy and high-quality consumption across China.”

Indeed, revenue for the online platform’s core e-commerce business increased by 47 percent to $4.95 billion, with mobile monthly active users up 24 percent on the year (now at 507 million). Also, Alibaba customers bought and sold roughly $547 billion-worth of merchandise through the platform over the course of the fiscal year 2017. As a matter of fact, mobile gross merchandise volume transacted through the Chinese retail giant’s marketplaces increased by as much as 49 percent, to reach $433 billion in USD; that accounts for nearly 80 percent of the company’s total volume this year. That is 22 percent higher than the $547 billion from the year prior.

At the same time, the company continues to work on diversifying its revenue stream(s), looking mostly at growing its cloud computing services as well as through expansion in media and entertainment businesses. And with all that in mind, Alibaba investors are now eager to learn more about the company’s ongoing international effort to grow, looking more towards building on its dominance in the Chinese online retail market and continue expanding internationally.

For example, the company has begun efforts to expand into Southeast Asia on the heels of reports showing Chinese products are popular in that market. The goal, of course, is to start selling local Chinese brands all over the world—and these brands are “eager” to make that happen. Zhang also notes that the company wants to help local Chinese farmers in rural villages sell their products to urban populations. Zhang comments, “We want to leverage the China engine to power growth in other markets.”

Latest News