Alibaba’s Comeback: Revenue Reports Surpass Forecast
If there are companies on sky-high this pandemic, they are undeniably from the technology sector, particularly in e-commerce.
China’s biggest technology company Alibaba made it past earnings and revenue forecasts.
The fiscal first-quarter profit doubled from last year. Net income totaled to ¥47.59 billion or ¥17.36 per share from ¥8.06 in the same period the previous year.
The positive news pushed stocks to 0.5% climb in premarket stock trading, recording a 23% increase in the year.
Alibaba’s total sales for the quarter stands at ¥153.8 billion or $22.2 billion.
Sales in its core commerce business made a comeback, reaching pre-pandemic performance. It jumped to ¥133.32 billion, translating to 34% climb for the quarter ended June.
Similarly, its cloud computing venture skyrocketed to ¥12.35 billion or a 59% increase brought by the shift to online shopping and work from home schemes.
Alibaba shares in the revamping stock market index S&P 500 gained 20%. The firm’s US-listed shares are up in the stock market, closing at 260.59 USD before the earnings call.
The firm maintains its grace under pressure as Trump administration threatened to go ahead with its Chinese-tech purge after starting with TikTok and WeChat.
The Sustainability of E-commerce
The company took advantage of the digital transformation’s growth, which accelerated Alibaba’s consumption and enterprise operations, its chief executive acknowledged.
The volume of online physical goods in its business-to-consumer (b2c) platform Tmall rose by 27% in the quarter. This is driven by the sustained growth of new customers and higher order frequency among existing users.
Adding to this is China’s quick recovery from the pandemic. The country is the world’s first major economy to record a 3% growth in Q2.
China’s biggest e-commerce platform currently boasts 742 million active users, up by 16 million from March figures.
Although traditional stores began to experience bouncing foot traffic following the easing of restrictions, online shopping has already taken the top post.
Online shopping offers convenience and a wide array of choices for consumers. Not to mention, its time and risk-saving offering.
Despite the excellent harvest, Alibaba is unstoppable to make growth sustainable. The company gears for the post-COVID environment, keeping a close watch on every shift and tweak in customer needs.
Growing competition against top competitors raises concerns for the technology giant’s ability to maintain leadership.
Recently, its top competitors JD.com and Pinduoduo, have been making more efforts in their platforms as they target to capture a more significant piece in the Chinese consumer market.
The good news in revenue validates analysts’ prior claim that the e-commerce frontrunner will bounce back better, as merchants and consumers prefer to take refuge in digital channels now more than ever.
