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Alibaba decreases guidance amid quarterly results

Chinese e-commerce giant Alibaba has reported a total revenue growth of 54 per cent year-on-year during its second-quarter 2018 results, earning ¥85.1 billion ($17.18 billion).

According to Business Insider, this quarterly revenue growth fell short of analyst expectations of ¥86.51 billion ($17.45 billion).

The group also saw net income attributable to ordinary shareholders of ¥20 billion ($4 billion), a 13 per cent year-on-year increase, as well as diluted earnings-per-share of ¥7.62 ($1.54).

However, looking forward, the group dropped its forecast revenue guidance for FY19 by 4 to 6 per cent to between ¥375 billion and ¥383 billion ($75.7 billion and $77.3 billion).

As it stands, the group expects revenue to grow year-on-year by approximately 54 to 56 per cent.

“Alibaba had another strong quarter of rapid growth,” Alibaba Group chief executive officer Daniel Zhang said.

“In particular, annual active customers increased by 25 million to reach 601 million in the 12 months ended September 30, 2018.”

Alibaba did see income from operations decrease by 19 per cent year over year to ¥13.5 billion ($2.73 billion). Its operating margin of 16 per cent was a decrease from the 30 per cent recorded at this time in 2017.

The business’s cloud-computing arm saw 90 per cent year-on-year growth to ¥5.6 billion ($1.13 billion), launching more than 600 products and features during the quarter ranging from big data analytics, AI application innovation, security and internet-of-things enhancements.

The business’s online Tmall operations saw a 30 per cent increase in gross merchandise value, driven by improved conversion rates and increased traffic in the fast-moving consumer goods, home furnishings and apparel categories.

Alibaba’s New Retail strategy has continued to pay off across its Hema range of supermarkets, with stores that have been in operation for at least 1.5 years seeing online reach 60 per cent of total sales for the September quarter. By the end of the quarter, a total of 77 Hema stores had been opened in China.

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