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Alibaba's online sales jump despite slowing China growth
[SHANGHAI] Transactions on the platforms of Chinese e-commerce giant Alibaba surged 28 percent in the September quarter, the company said Tuesday, despite slowing growth in the world's second largest economy.
Alibaba's closely-watched gross merchandise volume (GMV) - a measure of value for online sales - was US$112 billion in the three months ended in September, the company said in a statement.
"This was a great quarter for Alibaba Group, with strong growth across the board and particular out-performance in mobile," Alibaba chief executive officer Daniel Zhang said.
After years of breakneck growth, China's Communist leaders are looking to transition the economy to a "new normal" of slower, more sustainable expansion, driven by consumer demand rather than the investment and exports of the past.
Companies such as Alibaba - which is often compared to Amazon and eBay of the United States, and holds more than 90 percent of the consumer-to-consumer market in China - are crucial to the process.
But global markets have been roiled over concerns that China's new economy is not growing quickly enough to make up for stagnation in older industries.
Alibaba's New York-listed stock has fallen nearly 40 percent since November as a proxy for its home economy.
The GMV growth figure represented a slowdown from the 34 percent recorded in the quarter ended in June.
China logged its worst economic performance since the global financial crisis in the third quarter with gross domestic product rising just 6.9 percent - its lowest level in six years, prompting the government to cut interest rates just days ago.
"Alibaba's markets in first- and second-tier, as well third-tier cities are now saturated and facing fierce competition from other e-commerce providers," Zhang Yi, chief executive of consultancy iiMedia Research Group, told AFP before the results were released.
"Consumption is slowing down because the economic downturn has affected people's salary levels," he said.
Alibaba's Taobao platform dominates the consumer-to-consumer market, while its Tmall platform is believed to command more than half the Chinese market for business-to-consumer transactions.
Investors have sold the stock down 36 percent from its peak in November, far from the lofty valuations it commanded when it listed last year as the world's biggest ever public offering. It closed at US$76.35 on Monday.
Revenue in the September quarter rose 32 percent year-on-year to US$3.49 billion, Alibaba said, beating expectations for 21.3 billion yuan in a survey of analysts by Bloomberg News.
Net profit excluding investment gains surged 36 percent to US$1.46 billion, the company said.