Chinese tech giant Alibaba Group sold US$1 trillion worth of goods across its platforms in the last year, the company revealed in quarterly results late last week. But a plunge in profitability in the latest COVID-19 affected quarter sent shares down nearly 6 per cent, costing company founder Jack Ma a reported US$1.5 billion.
Cloud computing remains a bright spot for Alibaba, which leads that market in APAC market, reporting 62 per cent increase revenue compared to the previous financial year.
The Chinese multinational which specialises in ecommerce, retail and technology, reported it is seeing a “steady recovery” since March but the latest quarter has been difficult for shareholders. Net income is down 99 per cent year on year, which the company put down to the wider hit to the share market.
A company statement said, “The year-over-year decrease was primarily due to a net loss in investment income, mainly reflecting decreases in the market prices of our equity investments in publicly-traded companies, compared to a net gain recorded in the same quarter of 2019.”
For Alibaba founder Jack Ma – who began the company in 1999, growing it into a global powerhouse and making him China’s richest man at one point before stepping back in recent years – the share price hit sliced US$1.5 billion from his personal estimated wealth, according to Forbes.
But Alibaba still reported stronger operating results than many had expected.
“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance of over RMB500 billion. Revenue growth of 35 per cent year over-year was driven by solid performance of our domestic retail businesses as well as robust cloud computing revenue growth,” said Maggie Wu, Chief Financial Officer of Alibaba Group.
The company now claims to have 960 million customers globally and was able to hit its revenue guidance despite some of the early COVID-19 related economic downturn in China.
Revenue in the March quarter grew 22 per cent year on year and 35 per cent for the fiscal year on the back of a surge in demand for online shopping in China and the company’s burgeoning cloud business.
While global leaders Amazon and Microsoft are popular in Australia for Infrastructure as a Service, in the overall APAC region Alibaba is the clear leader and is gaining ground on Amazon in the global market, according to analysis by Gartner.
Alibaba’s cloud computing revenue grew 58 per cent year-over-year to US$1. 725 billion in the quarter ended March 31, 2020 and 62 per cent year-over-year in fiscal year 2020 to US$5.651 billion.
The company says the increase was primarily driven by increased revenue from both its public cloud and hybrid cloud businesses.