Alibaba’s sales for Q1 up 39 percent

Global Business

Alibaba's sales for Q1 up 39 percent

The Chinese consumer continues to spend – that’s what Alibaba’s latest earnings indicate. China’s biggest e-commerce company’s logged its highest rate of revenue growth in four quarters.

Alibaba\'s sales for Q1 up 39 percent

Alibaba\'s sales for Q1 up 39 percent

Alibaba’s latest earnings indicate Chinese consumers are continuing to spend. China’s biggest e-commerce company’s logged its highest rate of revenue growth in four quarters.

Sales for the first three months of 2016 rose 39 percent, year over year, to $3.75 Billion – beating expectations as its core online shopping business continues to grow.

But profits themselves missed expectations – falling for the first time. Alibaba fell short on adjusted earnings-per-share, coming in at 47 cents. Analysts were expecting around 55 cents.

That was mostly due to Alibaba’s aggressive acquisition spree and investments in new businesses, including a food delivery and media company.

Gross merchandise volume, the total of goods transacted on its platform, climbed 24 percent year over year to $115 billion. Transactions through mobile devices accounted for 73 percent of that.

The big take away: Although the Chinese economy’s growth has been slowing, Alibaba’s results indicate that the Chinese consumer is resilient and still doing a lot of shopping.

And CEO Zhang says Alibaba is on track to realizing its vision of hitting 2 billion consumers and $1 trillion in total merchandising volume by 2020.

To do that Alibaba needs to expand beyond China. To that end, Alibaba purchased Southeast Asian online retailer Lazada Group for roughly $1 billion.

Alibaba has spent over half a billion dollars getting stakes in Indian tech companies, like mobile payment provider PayTM and e-commerce site Snapdeal.

So it seems Jack Ma has his sights set on India as his next big market. Investors like that, as shares were up 4 percent to $78.83 on Thursday.


Dan McClory on Alibaba’s latest earnings

For more on Alibaba, we were joined by Dan McClory, Managing Director at Bonwick Capital Partners.

Dan McClory on Alibaba\'s latest earnings

Dan McClory on Alibaba\'s latest earnings

For more on Alibaba, we were joined by Dan McClory, Managing Director at Bonwick Capital Partners.