Alibaba posts soaring revenue figures for the year

Heather McIlvaine

7th May 2018

Alibaba Group on Friday reported soaring revenue figures for the quarter ended March 31 and the 2018 fiscal year driven by strong growth in its core commerce business and strategic investments in New Retail.

Total revenue for the quarter increased 61 per cent year-on-year to US$9.9 billion, with core commerce revenue increasing 62 per cent year-on-year to US$8.2 billion and cloud computing revenue increasing 103 per cent year-on-year to $699 million.

Revenue from digital media and entertainment increased 34 per cent year-on-year to US$840 million and revenue from other initiatives increased 8 per cent year-on-year to US$158 million.

Income from operations was US$1.5 billion. Adjusted EBITDA increased 11 per cent year-on-year to US$2.7 billion, while adjusted EBITDA for the core commerce segment increased 19 per cent year-on-year to US$3.5 billion.

“Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce business and investments we have made over the past several years in longer-term growth initiatives,” said Alibaba Group’s chief executive Daniel Zhang.

“With the continuing roll out of our New Retail strategy, our e-commerce platform is developing into the leading retail infrastructure of China. During the past year we also doubled down on technology development, cloud computing, logistics, digital entertainment and local services so that we are in a position to capture consumption growth in China and other emerging markets,” he said.

Highest growth rate since IPO

Alibaba ended the 2018 fiscal year with US$39.9 billion in revenue, a 58 per cent increase over the previous year. US$34.1 billion of this came from the company’s core commerce business, including its Taobao and Tmall e-commerce platforms. This represents a 60 per cent year-on-year increase in core commerce revenue, the highest revenue growth rate since the company’s IPO.

Revenue growth in core commerce was largely driven by Alibaba’s investments in content and technology to personalise its retail marketplaces, its marketplace expansion through organic growth and acquisitions and its strategic shift to New Retail to capture consumer wallet share through online-offline integrations.

H&M, Marni and Yonex established flagship stores on Tmall in the quarter, joining the more than 150,000 brands that sell through the platform, 18,000 of which are international brands from 74 countries selling into China through Tmall Global.

Tmall’s newly established Luxury Pavilion now counts close to 50 brands, including Burberry, Dom Perignon, Tod’s, Zenith, La Mer, Maserati and Guerlain.

Alibaba saw record transaction volumes in the 2018 fiscal year, with US$768 billion worth of goods purchased through its retail marketplaces, a 28 per cent over the previous year. This represents an acceleration compared to the 22 per cent increase in gross merchandise value it saw in the 2017 fiscal year.

The company ended the fiscal year with 552 million and 617 million mobile active customers.

Alibaba’s chief financial officer, Maggie Wu, said the company expects to maintain this high level of growth in the year ahead.

“Looking ahead to fiscal 2019, we expect overall revenue growth above 60 per cen, reflecting our confidence in our core business as well as positive momentum in new businesses. We expect our new growth initiatives will drive long-term, sustainable value for our customers and partners and increase our total addressable market,” she said.