In a Thursday earnings briefing, the company announced revenue rose to 50.1 billion renminbi, or $7.51 billion, for the three months ended June 30, delivering 14.03 billion renminbi, or $2.07 billion, in profit.
“We had a great quarter,” Alibaba’s executive vice chairman Joseph Tsai said. “However, I wanted you to know that these exceptional results did not come from anything specific we did during the quarter.”
“The reason we are able to deliver these results is that we sowed the seeds years ago by investing in technology, by investing in innovation, by investing in people and by being bold with a vision that nobody thought was possible. Today, the Alibaba economy is self-reinforcing, and it is as strong as ever.”
Alibaba’s retail business was the first order of the day. “The macro way of looking at the landscape is e-commerce accounts for 15 percent of total retail in China,” Tsai said. “That still leaves 85 percent of retail that is off-line. Whether this is just something to look at or presents tremendous opportunities for us depends on our ability to innovate.”
He said the goal was “not to simply ride the wave of converting purchases from off-line to online.”
Later adding, “Imagine a store where you can pick items from the shelf, and at the same time, purchase other items not from the shelf, but from your mobile phone. And then you tell the store to send everything you just bought to your home because you need to go catch a movie….That’s the kind of spontaneity, convenience and speed that modern-day consumers are going to expect.”
Its B2C site Tmall recorded a 49 percent year-over-year rise for physical goods gross merchandise volume for the quarter, with the fashion and apparel category acting as a key category for that growth.
Alibaba and its main competitor JD.com have ramped up the competition to attract luxury brands to their sites, as growth among mass-market brands has plateaued, said Liz Flora, APAC editor for the consultancy L2.
Anticounterfeiting controls have been crucial to persuading luxury labels to get on board. After it was categorized in December as a notorious market again by the U.S. Trade Representative’s Office, Alibaba has done a significant turnabout rolling out a raft of anticounterfeiting measures, such as increasing IP technology protections, and striking a new alliance with Kering, once a court adversary.
Research from L2 found that the average number of unauthorized listings per fashion brands on Taobao went from 213,830 to 49,020, or a 64 percent drop between February 2016 and April this year.