Supported by growth in e-commerce and cloud computing, Alibaba Group Holding's revenues for its first fiscal quarter ended on June 30 topped analysts' expectations. This came despite the difficult trade environment caused by the ongoing U.S.-China dispute, as well as an increasingly competitive e-commerce industry.
The Chinese e-tailer's sales increased by 42 percent from the year-ago quarter to 114,920 million yuan renmimbi (€14.7bn-$16.3bn).
Alibaba has made efforts to diversify geographically, as the market in China's biggest cities is becoming saturated. The group is now targeting consumers in smaller cities. Taobao, its main consumer-to-consumer platform, expanded into lower-tier cities with the help of the group's mobile payment app, Alipay, which is partly owned by Alibaba. The company said that 70 percent of Taobao's growth in annual active customers during the quarter came from “less developed” areas.
The group is also partnering with Starbucks to deliver coffee, and has been diversifying into cloud computing and digital entertainment.
During the quarter, Alibaba has expanded its user base to 674 million annual active consumers, an increase of 20 million from March. Its adjusted Ebitda jumped by 34 percent to RMB 39,238 million (€5.0bn-$5.6bn).
Revenues from the core e-commerce business rose by 44 percent to RMB 95,540 million (€12.2bn-$13.5bn). Sales from the wholesale business in China jumped by 33 percent to RMB 2,990 million (€382.6m-$424.5m).
Alibaba's revenues from international retail advanced by 29 percent to RMB 5,560 million (€556.0m-$789.4m), primarily due to the strong performance of Lazada, Southeast Asia's leading e-commerce platform. Meanwhile, sales from the international wholesale business gained 22 percent to RMB 2,240 million (€286.8m-$318.1m), led by increases in the average revenues from paying members on alibaba.com.
Thanks to heavy investments in cloud computing, artificial intelligence and online entertainment, revenues from the cloud business soared by 66 percent to RMB 7,780 million (€996.1m-$1.1bn), while sales from its digital entertainment and media business improved by 6 percent to 6,310 million (€807.6m-$896.0m).
Overall, the company's adjusted net income jumped by 54 percent to RMB 30,940 million (€4.0bn-$4.4bn).
As the company continues to evolve, its chief executive, Daniel Zhang, is expected to take over from the founder, Jack Ma, as chairman in September.