Alibaba’s annual net profit up 47pc

6 May, 2018 12:00 AM printer

BEIJING: Chinese e-commerce giant Alibaba on Friday announced a massive 47 percent leap in net profit for the fiscal year 2017/2018, helped by a rise in smartphone and tablet transactions on its shopping platform.

Profit climbed to 63.985 billion yuan ($10.2 billion), boosted by a 60 percent rise in revenue from its core business, the online retailer said, reports AFP.

The New York-listed firm added 98 million active consumers over the year ended March 31, to a total of 552 million using its e-commerce marketplaces.

Overall revenue climbed 58 percent year-on-year to 250.27 billion yuan, with revenue from cloud computing up 101 percent and digital media and entertainment up 33 percent.

For the fourth quarter, the company saw revenue soar a better than expected 61 percent year-on-year to 62 billion yuan -- better than the 59 percent rise predicted by analysts surveyed by Bloomberg.

The company said it expects revenue to match that trajectory in the year to March 2019, rising 60 percent, as the firm drives diversification into a wealth of new areas, including offline business like supermarkets and delivery operations. "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," group CEO Daniel Zhang said in a statement.

Alibaba, which has made billionaire founder Jack Ma one of China's richest men and a global e-commerce icon, has been on a roll, regularly beating revenue estimates.

"The results were very strong, it was much better than people were expecting," Julia Pan, a Shanghai-based analyst at UOB Kay Hian, told Bloomberg News. The overwhelming majority of the group's revenue still comes from online trading platforms, which continued to attract new customers in China where trends and shopping preferences can shift quickly.

With Taobao, Alibaba dominates 90 percent of the Chinese consumer-to-consumer market, and its Tmall platform controls half of the online transactions between professionals and individuals.

However, Alibaba plans to develop close links with traditional bricks-and-mortar retailers, notably the Hema supermarket chain, and investments in distribution chains in a "new retail" strategy.

The move echoes US online giant Amazon which has opened physical shops and last year acquired US chain Whole Foods Market.

"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," group CEO Zhang said.

In January Alibaba announced it would take a 33 percent stake in affiliated business Ant Financial, which operates the massively popular Alipay mobile payment application and credit scoring unit Sesame Credit, among other financial services businesses.