Alibaba June quarter: New Retail is paying off

Date : 24 August 2018

Alibaba has reported a total revenue of RMB 80.9bn (US$12.2bn), up 61% from the same quarter last year. The growth is mainly driven by its core ecommerce business and fast-growing cloud division.

Core ecommerce business

Alibaba's core ecommerce business, mainly Tmall and Taobao, is still the company's biggest unit, accounting for around 86 percent of revenues. Core ecommerce revenues were reported at RMB 69.19bn (US$10.09bn), represented a 61 percent year-on-year increase.

During this quarter, Alibaba added 24 million transacting users to a total of 576 million Annual Active Consumers. The average Annual Active Consumer places 90 orders across 16 product categories per year on Tmall and Taobao.

Tmall continued to expand its B2C market leadership with the GMV (Gross Merchandise Volume) of physical goods growing 34% year-on-year.

New Retail driving returns

Alibaba reported 340% growth in China Commerce Retail – Others, which is primarily New Retail, including its import business, Hema supermarkets, Intime department stores, as well as the food delivery service Ele.me that Alibaba now owns.

Alibaba plans to further expand the Hema network and its footprint in New Retail.

Alibaba’s three-pronged consumer offerings

Retail, entertainment and local services will be the long-term drivers of value creation for Alibaba. The Chinese middle class will continue to expand and more of these consumers are demanding a higher-quality lifestyle. Alibaba believes the real wage growth, high saving rates of the Chinese families and easier access to consumer credit will support the growth of domestic consumption in China. 

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