Alibaba Group Holding reported its first quarterly earnings Tuesday after going public with a record-breaking $25 billion offering in September.
What you need to know: Alibaba’s profit beat analysts’ expectations as shopping traffic in China picked up and more advertisers flocked to the company’s sites. Annual active buyers were up 52% year-over-year, which helped boost gross merchandise volume through Alibaba’s sites.
Alibaba makes money by acting as a middleman for online transactions. The company takes a commission on each purchase, which means Alibaba’s revenues are a percentage of the overall sales, or what the company refers to as gross merchandise volume, or GMV. Revenue for the quarter surpassed analysts’ estimates and was up almost 54% year-over-year.
The big number: Profit, excluding one-time items, reached 2.79 yuan per share, or 46 cents, surpassing analysts’ estimates of 2.74 yuan, or 45 cents, according to Bloomberg data. Revenue also beat expectations, coming in at 16.8 billion yuan, or $2.7 billion, compared with an estimated 16 billion yuan, or $2.62 billion.
What else you need to know: Alibaba has been luring more vendors to its Taobao Marketplace and Tmall.com website by promoting its advertising tools and cloud-computing services that delve into shoppers preferences. By offering a greater variety of vendor options, Alibaba is hoping to continue adding to the bottom line by growing GMV. The e-retailer is adding to its stable to become the dominant player in the $450 billion Chinese market.
Chairman and founder Jack Ma has been on the hunt for ways to expand Alibaba geographically as well as build out the scope of its offerings. Ma has been in Hollywood meeting with movie studios about potential content deals to add to its media offerings, especially as more Chinese youth stream shows from TV set-tops and their mobile devices. More than 217 million monthly active users accessed Alibaba’s mobile commerce apps in September alone.
Ma is also looking to work with Apple to build out a mobile payments system, and more initiatives may be ahead. Alibaba is “encouraged by continued improvement of mobile monetization which demonstrates the strong commercial intent of our users,” said CEO Jonathan Lu.
Beyond those offerings, the group is also making headway globally in its core online shopping business. Its AliExpress marketplace, founded in 2010, serves customers outside of China and has already become the lead online shopping destination in Russia and Brazil. Alibaba is on the hunt for deals that could help broaden its reach in Africa, Southeast Asia, the U.S. and Europe.
- Who Will Be TIME's Person of the Year 2023?
- Why Cell Phone Reception Is Getting Worse
- The Dirty Secrets of Alternative Plastics
- Column: It's Time to Scrap the Abraham Accords
- Israeli Family Celebrates Release of Hostage Grandmother
- In a New Movie, Beyoncé Finds Freedom
- The Top 100 Photos of 2023
- Want Weekly Recs on What to Watch, Read, and More? Sign Up for Worth Your Time