Alibaba today unveiled 61% revenue growth for the January – March quarter, partly driven by logistics subsidiary Cainiao, along with higher profits, and pledged to continue investing heavily in retail, technology, logistics and other areas this year.
The Chinese e-commerce group’s 61% growth took total revenue to RMB61.9 billion (US$9.9 billion) for the final quarter of its 2017/18 fiscal year. Profits (adjusted EBITA) grew 11% to RMB16.8 billion (US$2.7 billion).
Revenue from ‘Core Commerce’ (retail activities) rose by 62% to RMB51.3 billion (US$8.2 billion) and the number of annual active consumers reached 552 million, up 37 million over the 12-month period ended December 31, 2017.
In the full year ending March 2018, Alibaba revenues increased by 58% to RMB250.3 billion (US$39.9 billion), with Core Commerce revenue up by 60% to RMB214 billion (US$34.1 billion). Adjusted EBITA achieved growth of 40% to RMB97,003 million (US$15,465 million).
Alibaba Executive Vice Chairman Joe Tsai told analysts on a results call: “We had excellent year in fiscal 2018. Overall revenues grew 58% year-over-year, and Taobao and Tmall GMV accelerated its growth from 22% last year to 28% this year.”
He emphasised that Alibaba had gained further market share “because through technology and consumer insights we put the right products in front of the right customers at the right time”. He added: “We also executed tailored strategies in supply chain, product and merchant curation and logistics for key categories including apparel, FMCG, home appliances and consumer electronics.”
Tsai continued: “Our New Retail initiatives are substantially growing Alibaba’s total addressable market in commerce. In New Retail, we are anticipating changing consumer behaviour and increasing expectations of quality and convenience whether they shop online or in offline stores. In this process of digitizing the entire retail operation, we are driving a massive transformation of the traditional retail industry. It is fair to say that our e-commerce platform is fast becoming the leading retail infrastructure of China.”
The full takeover of ele.me, the online food ordering and delivery business, will help to power the New Retail strategy by enabling rapid deliveries from local stores, he said.
Meanwhile, logistics subsidiary Cainaio Network continued to develop its data platform and technology as the infrastructure for the New Retail strategy and means to ensure faster and more accurate delivery to consumers. “In March, we launched the first e-commerce dedicated intercontinental flight, significantly shortening the delivery time of packages shipped from China to Russia,” the group noted.
Cainaio, fully consolidated since October 2017, contributed revenues of RMB 2,852 million (US$ 455 million) from providing domestic and cross-border fulfilment services in the January – March quarter and RMB 6,759 million (US$ 1,078 million) for the October – March period, the company’s results showed.
CEO Daniel Zhang told analysts that the group will continue to invest in the Cainiao ‘global logistics infrastructure’ and ‘smart delivery solutions’.
Alibaba’s international business also grew rapidly, driven by consolidation of South East Asian platform Lazada as well as higher AliExpress sales. International commerce retail revenues grew by 63% to RMB 3,967 million (US$ 632 million) in the quarter and by 94% to RMB14,216 million (US$2,266 million) in the year as a whole.
“Over the past year, we have integrated Lazada’s operations into the Alibaba ecosystem by re-architecting its core technology infrastructure and strengthening its management team. Southeast Asia has developed into a very competitive market but is still in the early stages of online retail penetration. Our commitment to the region is reflected in our recent decision to invest US$2 billion, in addition to the approximately US$2 billion we have already invested, into Lazada to accelerate its growth and customer reach,” Alibaba commented.
Looking ahead to fiscal year 2019, the company said it expected further revenue growth of over 60%, reflecting its confidence in the continued performance of the core business and its growing addressable market.
