Chinese e-commerce giant Alibaba said Wednesday its June-quarter revenue jumped 28 percent to $3.27 billion, falling short of the $3.39 billion analysts were expecting, while its net profit more than doubled to $4.97 billion on a one-off accounting gain.
Employee compensation continued to weigh on the company’s profitability. Income from operations fell 25 percent to $832 million. But the company said a $3.99 billion gain from the deconsolidation of Alibaba Pictures boosted its bottom line.
Alibaba said GMV transacted on its China retail marketplaces in the quarter rose 34 percent to $109 billion.
Mobile GMV accounted for 55 percent of total GMV transacted on China retail marketplaces in the June quarter, compared to 51 percent in the quarter ended March 31 and 33 percent in the quarter ended June 30.
“We also made significant progress monetizing our mobile traffic, with our mobile revenue exceeding 50 [percent] of our total China commerce retail revenue for the first time,” said Maggie Wu, Alibaba’s chief financial officer.
“As buyers move to mobile, it improves auction dynamics and bidding behavior,” Wu said later. “We made a lot of effort to improve the user experience on mobile. We remain bullish on mobile monetization and it should approach PC [levels] or even higher.”
The company is under pressure to monetize mobile as consumers shift away from desktops to using their smartphones and tablet devices for shopping. It has focused its efforts on enhancing the mobile user experience, revamping the Tmall app twice in the last quarter and creating a seamless way for users to transition between the apps from their B2C platform on Tmall to its C2C on Taobao.
Despite the mobile growth, chief executive officer Daniel Zhang noted that there were still reservations for buying on mobile when it came to certain purchases. “Especially for those big-ticket items people still tend to buy on PC,” he said.
The company also announced on Wednesday that it has signed an exclusive deal with Macy’s China Limited, a joint venture between Macy’s Inc. and Fung Retailing, to open a Macy’s flagship store on its Tmall Global platform late in the year.
Last week, Alibaba rival JD.com reported its second-quarter earnings, saying that it narrowed its losses on a 61 percent surge in revenue. It said it expects to post up to 54 percent year-over-year revenue growth in the coming quarter.
Earlier this month, Alibaba said it has partnered with more than 160 brands from 100-plus apparel chains to help grow their presence in China, including Uniqlo, Gap, Adidas, Zara, Timberland, Massimo Dutti and Bershka. It also announced this week that it is investing $4.6 billion to buy 20 percent of electronics chain Suning Appliance Company Ltd.