Alibaba’s profit nearly doubled for the quarter ended June 30, bolstered by the strength of its core commerce division.
During the period net income was US$2.1 billion, up 96 per cent compared to the corresponding period a year earlier.
Revenue was $7.4 billion for the quarter an increase of 56 per cent year-over-year.
Alibaba’s core commerce division accounted for the largest share of revenue — $6.3 billion up 58 per cent. It’s active consumers (people buying stuff on its China retail marketplace) reached 466 million.
During an earnings call Alibaba’s executive vice chairman Joe Tsai said retail is a $5 trillion market in China, ecommerce accounts for 15 per cent and 85 per cent is offline. However, the company expects the distinction between online and offline will disappear.
“Our goal is not to simply ride a wave of converting purchases from offline to online. Our new retail strategy is an invention that anticipates and catalyses changes in consumer behaviour where time, place and method of purchase and consumption will be different from what we were used to before,” Tsai said.
Alibaba also revealed it led a $1.1 billion investment round in Tokopedia an Indonesian online marketplace, noting “Indonesia is a very, very important market.”
The investment further expands Alibaba’s presence in South East Asia and comes after Alibaba upped its stake in Lazada to 83 per cent earlier this year.
Revenue from Alibaba’s cloud computing business rose 96 per cent year-over-year to US$359 million. And its number of paying customers surpassed 1 million in the quarter. Operating loss from cloud computing was US$78 million and adjusted EBITA loss was US$15 million.
Digital media and entertainment grew 30 per cent year over year to US$602 million.
Revenue from Alibaba’s “innovation initiatives” increased 21 per cent year-over-year to US$95 million. The division was responsible for Alibaba’s voice assistant Tmall Genie, launched in July, which was developed by the company’s AI Lab.