Alibaba inks payments deal on back of revenue spike
Chinese e-commerce giant Alibaba has posted a 56 per cent spike in revenue for its third quarter, also announcing it has acquired a 33 per cent stake in its payment affiliate Ant Financial.
Alibaba’s revenues for the three months ending December 17 came in at ¥83.03 billion ($13.19 billion) up from ¥53.25 billion from the previous corresponding period and above consensus estimates.
Net income attributable to shareholders rose to ¥24.07 billion, or $1.41 per share, up 34.8 per cent from ¥17.9 billion in the same quarter a year earlier.
Alibaba’s revenue growth rate was its slowest in a year.
No cash will be involved in the Ant deal, as the e-commerce group will get newly-issued equity from Ant Financial in exchange for “certain intellectual property rights” owned by Alibaba that are exclusively related to Ant Financial.
“Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” said Daniel Zhang, Alibaba Group CEO. “We are excited by the continued momentum in new retail, which came to life during another record-breaking 11.11 Global Shopping Festival.”
The company has been pouring cash into experiments in what its founder, Jack Ma, calls “new retail”: a kind of teched-up re-envisioning of how people shop in store. In particular, it hopes to gather more detailed user data, which could help it offer more personalised services and ads to its customers online and off.
Zhang said the company expanded the scale and footprint of its New Retail initiatives with the vision of delivering true convergence of the online and offline consumer experience through mobile and enterprise technology.
Maggie Wu, chief financial officer of Alibaba Group, said with their strong performance for the quarter, they are taking up their 2018 fiscal year revenue outlook to 55 per cent to 56 per cent, which is an increase over the top end of the range of 53 per cent that they announced last quarter.
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