SHANGHAI — Alibaba saw revenue climb to 83 billion yuan, or $12.8 billion, in the third quarter ending Dec. 31, representing an increase of 56 percent year-over-year.
The result led Alibaba to revise its outlook for full-year revenue growth up to 55 to 56 percent, from its earlier estimate of 49 to 53 percent.
The growth was led by robust China retail growth of 57 percent, which came over a period of surprising softness in consumer sentiment, according to data released by China’s National Bureau of Statistics late last year, as well as returns from the company’s globalization strategy and “new retail” initiatives.
Alibaba is continuing a major push into brick-and-mortar retailing with plans to add 30 supermarkets in Beijing this year. In November, Alibaba said it would invest $2.88 billion for a 36 percent stake in Hong Kong-based Sun Art Retail as part of a strategic alliance to expand food and grocery retailing.
“We delivered another outstanding quarter and our business is performing stronger than ever,” said Daniel Zhang, Alibaba’s chief executive officer, who added this was the seventh consecutive quarter that revenue grew more than 50 percent. “It’s the direct result of our long-term, forward-looking approach to new user acquisition, new technology and creation of new user experiences.
“We have demonstrated what new retail looks like through innovations such as Hema [Alibaba’s cutting-edge chain of real world supermarkets] and inspired a global wave of experimentation in new retail. We believe the future of retail is much more than just connecting online and off-line, our new retail strategy is a combination of creating new and transforming old.”
Alibaba’s fiscal third quarter also includes its blockbuster Singles Day sales event. Singles Day sales in November 2017 topped 168.2 billion yuan, or $25.39 billion at current exchange, in gross merchandising value.
Annual active consumers on Alibaba’s China retail marketplaces reached 515 million, an increase of 27 million from the previous quarter, representing the largest growth in 12 quarters. The Taobao app drove an increase in the number of mobile monthly annual users of Alibaba’s retail marketplaces to a total of 580 million in December 2017, an increase of 31 million mobile users from the prior quarter, an increase Alibaba’s ceo said was due to artificial intelligence innovations leading to further personalization.
“The Taobao app is now positioned as a consumer community and content driven platform. We apply our new personal technologies and real-time behavior driven algorithm on Taobao so today people have a very personal experience on Taobao. With the expansion of our categories and services and expansion of our consumer base we will expand our data and expand our understanding. We would like to continue to apply new technologies so we don’t just respond to people’s demands, but actually create consumer demand,” Zhang said.
Also on Thursday’s earnings call, Alibaba revealed it will acquire a 33 percent equity interest in Ant Financial, its digital payment partner and key element in its new retail strategy, a significant part of which includes enabling digital payments in brick-and-mortar stores.
Alibaba’s stock was trading near record highs in the days prior to the earnings announcement. Compared with the previous quarter, year-on-year growth slowed, with the quarter ending September 2017 seeing Alibaba report revenue of 55.12 billion yuan, or $8.34 billion, for the quarter, with revenue increasing 63 percent on the year.
It’s already been a tumultuous 2018 for Alibaba, with the Office of U.S. Trade Representative Robert Lighthizer naming its Taobao.com platform to its “Notorious Market’s List” for carrying goods that are either counterfeit or trademark twisting. The list, which amounts to a public shaming of companies that are seen as needing to do more, is nothing new — Taobao.com was also considered “notorious” when the Obama administration put together its previous iteration in late 2016.