Transactions on Alibaba surged 28% in the September quarter, the company said yesterday, despite slowing growth in the world’s second-largest economy.
Alibaba’s closely-watched gross merchandise volume (GMV) a measure of value for online sales was 112bn (713bn yuan) in the three months ended in September, the company said in a statement.
“This was a great quarter for Alibaba Group, with strong growth across the board and particular out-performance in mobile,” said Alibaba chief executive officer Daniel Zhang.
After years of breakneck growth, China’s Communist leaders are looking to transition the economy to a “new normal” of slower and more sustainable expansion driven by consumer demand rather than the investment and exports of the past.
Companies such as Alibaba which is often compared to Amazon and eBay of the US, and holds more than 90% of the consumer-to-consumer market in China are crucial to the process.
But global markets have been roiled over concerns that the Asian giant’s new economy is not growing quickly enough to make up for stagnation in older
industries.
The GMV year-on-year growth figure represented a slowdown from the 34% recorded in the quarter ended in June.
Alibaba’s New York-listed stock has fallen nearly 40% since November as a proxy for its home economy.
China logged its worst economic performance since the global financial crisis in the third-quarter, with gross domestic product rising just 6.9% its lowest level in six years.
In response the government last week cut interest rates for the sixth time since November in a bid to stimulate
expansion.
“Alibaba’s markets in first- and second-tier, as well as third-tier cities are now saturated and facing fierce competition from other e-commerce providers,” Zhang Yi, chief executive of consultancy iiMedia Research Group, told AFP before the results were released.
“Consumption is slowing down because the economic downturn has affected people’s salary levels,” he said.
Alibaba’s Taobao platform dominates the consumer-to-consumer market, while its Tmall platform is believed to command more than half the Chinese market for business-to-consumer transactions.
The company said it had 386mn annual active buyers on its China retail marketplaces at the end of September, up 19mn from the end of June. Revenue in the September quarter rose 32% year-on-year to 3.49bn (22.17bn yuan), Alibaba said, beating expectations for 21.3bn yuan in a survey of analysts by Bloomberg News.
Net profit excluding investment gains surged 36% to 1.46bn (9.25bn yuan), the company said.
With deep pockets, Alibaba is making a string of acquisitions as it tries to develop beyond its traditional transaction platforms into a broader Internet company.
Earlier this month it made a multi-billion-dollar offer to buy the outstanding shares of online video company Youku Tudou, China’s equivalent of YouTube.
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