At the World Artificial Intelligence Conference (WAIC) in Shanghai, China on July 6, 2023, the Alibaba Group sign was prominently displayed. The presence of the Chinese e-commerce giant continues to make waves in the industry.
According to Refinitiv data, Alibaba reported a significant 14% year-over-year revenue growth in the quarter ended June 30. This marks the largest annual increase in sales since the September 2021 quarter. As a result, the company’s U.S.-traded shares experienced a 4.5% increase in premarket trading.
Let’s take a closer look at Alibaba’s performance in the June quarter compared to Refinitiv consensus estimates:
- Revenue: 234.16 billion yuan ($32.29 billion), exceeding the expected 224.92 billion yuan and representing a 14% YoY growth.
- Net income attributable to ordinary shareholders: 34.33 billion yuan, surpassing the expected 28.66 billion yuan and demonstrating a 51% YoY increase.
Alibaba’s main business, Taobao and Tmall Group, witnessed a 12% YoY revenue rise to 114.95 billion yuan in the June quarter. The Taobao app for online shopping experienced a 6.5% increase in daily active users compared to the previous year, indicating sustained growth.
Additionally, Alibaba’s push into international markets yielded positive results. Revenue from international commerce retail surged by 60% YoY to 17.14 billion yuan in the June quarter. This international demand also contributed to the 34% YoY revenue growth of Alibaba’s Cainiao logistics business, amounting to 23.16 billion yuan during the same period.
In terms of Alibaba’s cloud business, it reported a 4% revenue growth to 25.12 billion yuan.
It is essential to consider the context of these quarterly results. In the previous year, China was grappling with the Covid-19 pandemic, leading to a two-month lockdown in Shanghai. The current figures reflect a rebound in the Chinese economy, although domestic consumer demand remains sluggish.
Alibaba’s Restructuring
Alibaba, headquartered in Hangzhou, has recently undergone significant transformations. In March, the company announced its division into six business groups, some of which have the capability to raise external funding and go public. One such division is Alibaba’s cloud computing business, which the company plans to publicly list.
As part of these changes, CEO and Chairman Daniel Zhang will step down in September but will continue to lead Alibaba’s cloud computing division. Eddie Wu, an Alibaba veteran, will assume the role of CEO, while Joe Tsai will become the new chairman, as announced in June.
“Alibaba delivered a solid quarter as we continue to execute our Reorganization, which is beginning to unleash new energy across our businesses,” stated Zhang in a press release on Thursday.
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