The Alibaba headquarters.

Alibaba pulled off a solid first fiscal quarter of 2020, with revenue rising 42 percent for the three months ended June. Revenue was 114.92 million renminbi, or $16,741 million, coming in above the 111.73 billion renminbi, or $15.93 billion, expected according to a poll of analysts by Refinitiv data.

Net income attribute to ordinary shareholders was 21.25 billion renminbi, or $3.09 billion, an increase of 54 percent year-over-year.

The firm is often seen as a proxy for the Chinese economy, of which the market is anticipating a slowdown due to the ongoing trade war with the U.S. But even as additional tariffs were put on the horizon by President Trump this week, Alibaba management projected confidence in an earnings call.

Executive chairman Joe Tsai once again emphasized the strength of the Chinese domestic market, pointing to the rising middle class approximately 300 million strong, or roughly the size of the overall U.S. population, and a focus on less developed cities that would drive the company’s growth.

“Other than Beijing, Shanghai and Shenzhen, China has more than 150 cities with a population with at least 1 million people,” Tsai said.

Taobao is its main engine for lower-tier city growth, which is emerging as the pivotal battleground for e-commerce companies. More than 70 percent of the increase in annual active consumers for Alibaba was from less developed areas, thanks to a range of initiatives to cater to a broader base of users, such as using simpler interfaces for first-time or less-frequent users.

Annual active consumers on the firm’s China retail marketplaces reached 674 million, an increase of 20 million from March 31.

Tmall continues to gain wallet share and grow faster than the sector average, Alibaba said. Physical goods GMV, excluding unpaid orders, grew 34 percent year-over-year in the quarter.

Tmall, which has been an official partner of NYFW since 2017, announced two weeks prior that it would be investing more into fashion partnerships, with new activations for Paris Fashion Week and Milan Fashion Week this year.

Without breaking out numbers, the company added that its Southeast Asian business via Lazada showed “solid operational improvement after strengthening its third-party marketplace business, management team and technology infrastructure.”

Lazada achieved more than 100 percent year-over-year order growth for the third consecutive quarter, it said.

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