Alibaba Expects Faster Revenue Growth on Commerce, Cloud Businesses

May 4, 2018

Chinese e-commerce giant Alibaba Group Holding Ltd. says it expects revenue to grow 60% in the next year, as its core commerce business and cloud computing business attracts more customers.

Alibaba reported its fourth-quarter profit fell 29% to 7.56 billion yuan ($1.21 billion) from a year ago, in part due to a one-time gain from the disposal of assets including Chinese internet firm MoMo Inc. in the same period a year ago. Excluding the one-off disposal, net income in the quarter ending March 31 rose 37%, the company said Friday.

That topped estimates by analysts at FactSet Research and Thomson Reuters, but fell short of a forecast of 7.7 billion yuan by analysts polled by S&P Global Market Intelligence. Revenue for the quarter increased 61% from the year-earlier period, to 61.93 billion yuan.

n a call with analysts on Friday, Maggie Wu, the company’s chief financial officer, said its commerce and cloud business would lead the growth in revenue for Alibaba in the next fiscal year. Stripping out new acquisitions such as food delivery platform Ele.me and logistics arm Cainiao Network Technology Co., revenue growth would still be more than 50%, she said.

In Friday’s statement, NYSE-listed Alibaba said revenue in its core commerce unit — which runs China’s two largest online retail sites, Taobao and Tmall — rose 62% to 51.29 billion yuan. Its cloud-computing business revenue slightly more than doubled to 4.39 billion yuan.

Sales from Alibaba’s digital-media and entertainment division, which includes mobile browser UCWeb, video-streaming site Youku Tudou and Alibaba Pictures Group , rose 34% to 5.27 billion yuan.

The company said it would continue to invest in new initiatives, extending its buying streak from over the last few years. This year, Alibaba has already snapped up stakes in companies in brick-and-mortar retail and growing its control of affiliates such as Southeast Asia’s Lazada and Ant Financial Services Group Co.

The Hangzhou-based internet company founded by Jack Ma has been expanding into physical retail as growth in China’s e-commerce space slows and competition intensifies.

Among others, it invested $2 billion in Lazada in March, doubling down on the existing $2 billion it already put in. Barely a month later, it also announced it would fully acquire Ele.me, a $9.5 billion online food delivery and services platform.

In response to a question, Alibaba President Joe Tsai said U.S.-China trade friction was unlikely to affect Alibaba in a significant way, as there would always be alternative sourcing destinations for products, even if they were unable to import from the U.S.

Google places a $550 million bet on China's second-largest e-commerce player

Published 1 Hour Ago

Tech giant Google said Monday it will invest more than half a billion dollars in China's second-largest e-commerce player, JD.com.

As part of a strategic partnership, Google will put $550 million in cash into JD.com, the companies said in a statement. In return, Google will receive more than 27 million newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share.

That's equivalent to $40.58 per American depository share based on the volume-weighted average trading price over the prior 10 trading days. JD.com listed American depository shares in its group company on the Nasdaq in 2014.

The two tech companies said they would work together to develop retail infrastructure that can better personalize the shopping experience and reduce friction in a number of markets, including Southeast Asia.

For its part, JD.com said it planned to make a selection of items available for sale in places like the U.S. and Europe through Google Shopping — a service that lets users search for products on e-commerce websites and compare prices between different sellers.

When retailers partner with Google, it gives their products visibility and makes it convenient for consumers to purchase them online. For the tech giant, its shopping service is important in helping to win back product searches from Amazon and to stay relevant in the voice-powered future of e-commerce.

The partnership would open a channel for JD.com to sell to consumers outside China, especially at a time when trade tensions between Beijing and Washington are high.

The Chinese e-commerce company competes aggressively with Jack Ma's Alibaba in China's massive e-commerce market. Both companies have invested significantly in technology, retail and logistics to win over consumers.

The e-commerce player also has the backing of another major Alibaba rival — Chinese tech giant Tencent, which is involved in business areas including social networks, digital payments and gaming. It also operates China's largest social messaging platform, WeChat.

JD.com's partnership with Tencent allows the e-commerce company to sell directly to consumers through the WeChat app.

At the same time, JD.com also teamed up with U.S. retail giant Walmart in the grocery business. Reports said Walmart opened a small high-tech supermarket in China where consumers can use smartphones to pay for items that are mostly available on its virtual store on online platform JD Daojia, an affiliate of JD.com.

JD.com and Google Announce Strategic Partnership

June 18, 2018 12:05 a.m. ET

• JD.com and Google Announce Strategic Partnership
• Google to invest $550 million in JD.com
• Companies to explore joint development of retail solutions to enable helpful, personalized and frictionless shopping experiences in several regions including Southeast Asia, the U.S. and Europe
• JD.com to join Google Shopping and offer a curated selection of high-quality products to consumers across multiple regions

BEIJING, June 18, 2018 (GLOBE NEWSWIRE) -- JD.com, Inc., China's leading technology-driven e-commerce company, and Google, announced today that Google will invest $550 million in cash in JD.com as part of a strategic partnership.

Google and JD plan to collaborate on a range of strategic initiatives, including joint development of retail solutions in a range of regions around the world, including Southeast Asia, the U.S. and Europe. By applying JD's supply chain and logistics expertise and Google's technology strengths, the two companies aim to explore the creation of next generation retail infrastructure solutions, with the goal of offering helpful, personalized and frictionless shopping experiences. JD also plans to make a selection of high-quality products available for sale through Google Shopping in multiple regions.

"This partnership with Google opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world," said JD.com's Chief Strategy Officer Jianwen Liao. "This marks an important step in the process of modernizing global retail. As we celebrate our June 18 anniversary sale, this partnership opens a new chapter in our history."

"We are excited to partner with JD.com and explore new solutions for retail ecosystems around the world to enable helpful, personalized and frictionless shopping experiences that give consumers the power to shop wherever and however they want," said Google Chief Business Officer Philipp Schindler.

Under the agreements, Google will receive 27,106,948 newly issued JD.com Class A ordinary shares at an issue price of $20.29 per share, equivalent to $40.58 per ADS, based on the volume-weighted average trading price over the prior 10 trading days.

Reports of Jack Ma’s impending retirement are greatly exaggerated, it seems. Ma, the co-founder and executive chairman of Alibaba, has pushed back on claims that he is on the cusp of leaving the $420 billion Chinese e-commerce firm.

The New York Times first reported that the entrepreneur plans to announce that he will leave the firm to pursue philanthropy in education, a topic he is passionate about — Ma is a former teacher. But that news was quickly rebutted after Ma gave an interview to the South China Morning Post — the media company that Alibaba bought in 2016— in which he explained that he plans to gradually phase himself out of the company through a succession plan.

When reached for comment, Alibaba pointed TechCrunch to the SCMP report which claims Ma’s strategy will “provide [leadership] transition plans over a significant period of time.”

Alibaba earnings: China’s economic issues create concerns for Alibaba

Published: Nov 1, 2018 11:48 a.m. ET

Alibaba Group Holding Ltd. is just a few days away from its biggest shopping event of the year, but Singles Day will arrive amid concerns about whether macroeconomic issues in China are dampening consumer spending.

In the past few weeks, numerous analysts have brought down their Alibaba price targets, arguing that soft wage growth, tightening lending, trade-war fears and lower income from investing could hurt spending power in China.

The September period, Alibaba’s fiscal second quarter, isn’t usually a terribly interesting one for the company, but the e-commerce giant’s results and commentary will be closely watched this time around for indications about consumer behavior.

The “main investor focus during the call” will likely be Alibaba’s outlook for the second half of its fiscal year, Helfstein argued, since he thinks that “near-term headwinds” might impact the company’s ability to achieve its target of 60% revenue growth for the year.

Earnings: Analysts surveyed by FactSet expect that Alibaba generated adjusted earnings per share of $1.06 for the September quarter, down from $1.29 a year earlier. According to Estimize, which crowdsources projections from hedge funds, academics, and others, the average estimate calls for $1.18 in adjusted EPS.

The U.S. currency estimates on FactSet convert RMB to dollars when analysts issue their reports, which can lead to inconsistent currency conversions with figures Alibaba provides, as the company uses the conversion rate from the day the quarter ended. On an Renminbi basis, FactSet calls for adjusted earnings per share of 7.39 RMB, down from 8.52 RMB in the year-earlier quarter.

Revenue: The FactSet consensus calls for $12.5 billion in revenue, while the Estimize consensus calls for $12.8 billion. In the prior September quarter, Alibaba reported sales of $8.3 billion.

FactSet projects 86.7 billion RMB in revenue, up from 54.7 billion RMB a year earlier.

Alibaba Sales Rise 54% Despite Concerns Over Slowing Chinese Economy

Nov. 2, 2018 7:40 a.m. ET

BEIJING—Chinese e-commerce giant Alibaba Group Holding Ltd. BABA 6.30% reported a 54% rise in fiscal second-quarter revenue from the year-earlier period, driven by solid demand from Chinese consumers online, but the figure was short of analyst estimates.

Its quarterly net income increased 13% to 20.0 billion yuan ($2.9 billion), nearly double the 10.6 billion yuan that analysts had expected. A year earlier, it posted 17.7 billion yuan.

Hangzhou-based Alibaba’s revenue for the three months ended Sept. 30 was 85.1 billion yuan ($12.3 billion), compared with 55.1 billion yuan the same period a year ago, the company said Friday. Analysts polled by FactSet expected the company to post 86.7 billion yuan.

“Alibaba had another strong quarter of rapid growth. In particular, annual active consumers increased by 25 million to reach 601 million in the 12 months ended September 30, 2018,” Chief Executive Daniel Zhang said in a statement.

The company also said it is cutting its full-year revenue forecast by 4% to 6%, and now expects to post 375 billion yuan to 383 billion yuan in revenue.

Revenue from Alibaba’s core commerce unit—which runs China’s two largest online retail sites, Taobao and Tmall—rose 56% to 72.5 billion yuan.

China's JD.com feels pressure as sales of big ticket items slow

BEIJING (Reuters) - Chinese e-commerce firm JD.com Inc’s shares came under further pressure on Monday after the company reported its slowest quarterly revenue growth since its initial public offering in 2014.

JD.com, which is backed by Walmart Inc, Alphabet Inc’s Google and China’s Tencent Holdings, has already lost nearly half of its market value this year as it fights intense competition for Chinese online consumers.

On Monday executives said slower sales in its core e-commerce business, particularly big ticket items, dented third-quarter earnings growth, adding that they expect an upturn in profits next year.

While revenue rose 25 percent from the same period a year earlier, it lagged analysts’ forecasts and was well below previous growth rates, which peaked at over 60 percent in 2015.

The company also forecast fourth quarter sales growth between 18 and 23 percent, below an average analyst estimate of 23.5 percent.

Chief financial officer Sidney Huang said the “relatively soft” sales forecast was linked to an ongoing consumption slowdown in China.

JD.com’s technology and content costs for the third quarter were 3.4 billion yuan, almost doubling from a year earlier, reflecting a steep investment in research and development, including warehouse technology, offline retail and drones.

JD.com said revenue totaled 104.8 billion yuan ($15.09 billion) for the quarter ended Sept. 30, missing an average estimate of 106.2 billion yuan from 22 analysts, according to IBES data from Refinitiv.

JD.com’s volumes are seasonally lower in the third quarter as it ramps up to its November Singles’ Day promotion period. This year, it sold 158.9 billion yuan in goods during the month-long event, up 17 percent form a year earlier.

Despite the lower-than-expected sales, the company reported income of 0.80 yuan per share, above an estimate of 0.72 yuan, driven by stronger sales in its tech services unit, which grew at almost twice the rate of its general product sales.

Alibaba earnings: China slowdown’s effect on e-commerce spending is key factor

Jan 29, 2019

Amid investor uncertainty about the state of China’s economy and the effect of trade tensions, Alibaba Group Holding Ltd. will provide its take about consumer spending in the country Wednesday.

The Chinese e-commerce giant is due to report fiscal third-quarter results before the market opens Wednesday. The company’s holiday-period results will show whether it suffered as well from a general deceleration in e-commerce spending, which the Chinese government reported for the December quarter.

Earnings: Analysts surveyed by FactSet project that Alibaba recorded $1.69 in adjusted earnings per share for the December quarter, up from $1.63 a year earlier. According to Estimize the average projection is for $1.67 a share in earnings.

The U.S. dollar currency estimates on FactSet convert RMB to dollars at the time that analysts issue their notes, which can lead to inconsistent currency conversions with figures Alibaba provides, since the company uses the conversion rate from the last day of the quarter. On a Renminbi basis, the FactSet consensus calls for 11.42 RMB in earnings per share, up from 10.26 RMB a year earlier.

Revenue: Analysts tracked by FactSet call for $17.6 billion in fiscal third-quarter revenue, up from $12.8 billion a year ago. The Estimize consensus is for $17.3 billion. In Renminbi terms, analysts surveyed by FactSet call for 119.1 billion RMB in December-quarter revenue, compared with 80.3 billion RMB in the year-earlier period.

Alibaba’s cloud computing business will be in focus again this quarter, though it represents a small portion of the company’s overall revenue at roughly 7%. “We believe the company’s focus in cloud remains growing customers and market share and not profitability,” wrote RBC Capital Markets analyst Mark Mahaney, who rates the shares at outperform with a $200 price target.

Margin commentary around the cloud business and other areas of Alibaba are of key interest to MKM Partners analyst Rob Sanderson, who expects that Alibaba’s competitors are going to cut their “spending intensity” for the current calendar year. He’s interested in Alibaba’s spending plans around video content and food delivery, both of which are drags on the company’s margins.

Analysts are also looking for updates about the company’s “new retail” initiatives, which are focused on merging online and offline commerce. The company runs Hema grocery stores that are modeled on the online/offline concept, and Jefferies analyst Karen Chan is interested in the steps Alibaba might take to help with the long-term margin profile of these efforts, which, in her view, could include a delivery fee for each online order. Chan rates the shares a buy with a target price of $195.

The holiday-quarter included Singles Day, the biggest shopping event of the year. Alibaba made efforts to incorporate Ele.me, its food delivery business, and Hema, the “new retail” grocery stores, in its Singles Day offerings. Look for updates from management around whether the shopping extravaganza has had lasting effects on the usage of these Alibaba services.

Alibaba’s Revenue Jumps Despite China Slowdown

Jan. 30, 2019

BEIJING— Alibaba Group Holding Ltd. said its October-December revenue rose 41% from the year-earlier period, just below analyst estimates, with resilient consumer demand helping the Chinese e-commerce giant weather China’s economic slowdown.

Alibaba’s fiscal third quarter revenue was 117.28 billion yuan ($17.5 billion), compared with 83.03 billion yuan the same period a year before, the company reported Wednesday. Analysts polled by FactSet expected the company to post 119.03 billion yuan.

Its quarterly net income increased 37% to 33.05 billion yuan, above the 21.430 billion yuan that analysts had expected. A year earlier, it posted 24.073 billion yuan.

NYSE-listed Alibaba runs China’s two largest online retail platforms, Taobao and Tmall, and so serves as a barometer for China’s consumer economy. The economy’s vitality is key for Alibaba because it affects retail spending by consumers and ad purchases by merchants on its online platforms.

Last week Alibaba Executive Vice Chairman Joe Tsai said demand for smaller items such as apparel, consumer staples and fast-moving consumer goods like toiletries have continued to be strong despite a slowdown of big-ticket items such as cars.

Alibaba’s third-quarter sales were boosted by an annual national shopping promotion, called Singles’ Day, on Nov. 11, a rough equivalent to Black Friday and Cyber Monday combined. Vendors sold a record 213.5 billion yuan, or $30.8 billion, worth of goods on its platforms that day, 27% more than in 2017.

Revenue from Alibaba’s core commerce unit—which runs the Taobao and Tmall sites—rose 40% to 102.84 billion yuan.

Revenue from its cloud-computing business rose 84% to 6.61 billion yuan, while sales from Alibaba’s digital-media and entertainment division, which includes mobile browser UCWeb, video-streaming site Youku Tudou and Alibaba Pictures Group , rose 20% to 6.49 billion yuan.

JD.com earnings reported Thursday came in better than expected, defying a slowdown in China's economic growth. JD.com stock jumped on the news.

Before the open, The China e-commerce company reported adjusted earnings of 7 cents per share for the fourth quarter, on net revenue of $19.6 billion. That was up 22% from the year-ago period. Wall Street expected an adjusted loss of 4 cents on revenue of $19.149 billion, according to Zacks Investment Research. Total revenue climbed to $20.2 billion.

Backed by Tencent and Walmart, JD.com online accounts hit 305 million. up 4% from the year ago period. It has more than 210,000 merchants on its online marketplace. JD's primary competitor is Alibaba.

JD.com Revenue Beats as Singles’ Day Bargains Drive Spending

February 28, 2019

JD.com Inc. posted fourth-quarter revenue ahead of estimates, as Singles’ Day promotions helped the Google-backed online retailer fend off competition despite a decelerating Chinese economy.

Sales for the three months ending December hit 134.8 billion yuan ($20.2 billion), surpassing the average projection of analysts. The Beijing-based company expects revenue this quarter of 118 billion yuan to 122 billion yuan, versus the 118.9 billion yuan anticipated.

The result comes at a critical point for the e-commerce giant, which has invested heavily in warehouses and distribution networks but now faces a slowdown in Chinese consumer spending. Its business model relies on a rising middle class willing to pay more for faster delivery and other services, but trade tensions and a slowing domestic economy have driven users to cut-price rivals like Pinduoduo Inc. Annual active buyers reached 305.3 million in the year ending December, rising just 100,000 from the figure disclosed during the previous quarter.

JD’s outperformance on the topline, however, underscored the resilience of overall online sales versus physical retail, and the company’s ability to drive business through promotions.

"We are cautiously optimistic for the second half of this year when the government’s various incentive policies begin to take effect," said JD.com Chief Financial Officer Sidney Huang, adding that the slowing economy had impacted the sale of goods like electronic appliances. "We should see better cashflow this year."

JD.com Earnings Crush Views, Tencent Deal Extended; Shares Jump

May 10 2019

China e-commerce company JD.com (JD) reported better-than-expected first-quarter results Friday and extended its strategic alliance with internet giant Tencent (TCEHY). JD.com stock initially soared then settled back.

Reporting before the market open, JD.com earnings came in at an adjusted 2.23 yuan per share, or 33 cents, on revenue of 121.1 billion Chinese yuan, or $18 billion. Wall Street expected JD.com earnings of 12 cents a share on revenue of $17.68 billion. Revenue rose 21% in local currency from the year-ago period.

JD.com and China messaging and gaming giant Tencent extended their strategic alliance for three years as they both battle e-commerce titan Alibaba (BABA). Tencent owns nearly 20% of JD.com stock. Tencent's WeChat messaging service and other properties help drive JD.com's e-commerce sales. Meanwhile, JD.com embraces WeChat Pay.

JD.com expects its partnership with Tencent to improve customer satisfaction, reach a larger user base and further expand its presence on mobile commerce.

Alibaba and JD.com are the two largest e-commerce companies in China. JD.com has more than 220,000 merchants on its online marketplace.

Annual active customers on the JD.com platform reached 310.5 million, up about five million from the previous quarter and up 15% from the year-ago quarter.

Alibaba Defies China Slowdown; Sales, Earnings Top Estimates

May 15, 2019

Alibaba Group Holding Ltd. posted sales and earnings that topped estimates as the Chinese e-commerce giant overhauled shopping recommendations to defy a slowing economy.

Revenue climbed to 93.5 billion yuan ($13.6 billion) in the three months ended in March, about 1.8% above estimates as adjusted earnings-per-share of 8.57 yuan topped projections for 6.5 yuan. Alibaba expects sales in the current year to jump at least 33% to more than 500 billion yuan.

As Alibaba pushes deeper into businesses like cloud computing, it’s getting better at understanding e-commerce customers and making money from recommendations based on their preferences. The move is driving more sales than traditional search and boosting its ability to sell targeted advertising to merchants on its main Taobao platform. That is bolstering revenue growth even as escalating U.S.-Chinese tensions threaten to further dampen the world’s No. 2 economy.

“The results were really good, especially given how the macro economy hasn’t been that great," said Steven Zhu, an analyst with Pacific Epoch in Shanghai. “It’s a great sign that core e-commerce was growing strong.”

The core commerce business posted revenue of 78.9 billion yuan, a jump of 54%. Alibaba’s customer management revenue, which includes advertising and fees charged to merchants, grew by 31%. That’s a sign that the recommendation-based ad business is luring more merchants to spend, said Zhu.

Revenue from Alibaba’s cloud unit surged 76% to 7.7 billion yuan in the quarter as the business becomes a key pillar or growth, with more than half the market in China.

The cloud business could post growth of 46% per year through 2022, according to Bernstein estimates. In Asia, Gartner forecast that Alibaba last year accounted for 19.6% of the Asian market for infrastructure as a service and infrastructure utility services, two of the most popular forms of cloud business. That means its regional market share rose by nearly a third from 2017, while Amazon’s fell slightly to 11%.

Sales from the digital media entertainment unit rose 8% to 5.7 billion yuan.

The Chinese tech billionaire behind Asia’s model of Amazon has reportedly not been seen in public for greater than two months after falling foul of President Xi Jinping.

Jack Ma, certainly one of China’s most profitable and outspoken tycoons, criticised the nation’s ‘pawnshop’ monetary regulators and state-owned banks in an incendiary speech in Shanghai in October.

He referred to as for reform of a system that ‘stifled enterprise innovation’ and likened world banking laws to an ‘outdated folks’s membership’.


The speech angered the Chinese authorities, which seen Ma’s criticisms as an assault on the authority of the Communist Party, and led to its extraordinary clampdown on Ma’s enterprise actions.

In November, officers in Beijing ‘dressed down’ Ma and suspended the blockbuster $37billion preliminary public providing of his Ant Group on the direct order of President Xi, the Wall Street Journal studies.

They then suggested Ma to stay in China earlier than launching an anti-monopoly investigation into Ma’s Alibaba Group Holding on Christmas Eve, in accordance with Bloomberg. Beijing additionally ordered Ma’s monetary tech firm Ant Group to cut back its operations.

Ma then mysteriously disappeared from his Dragons’ Den-style TV present Africa’s Business Heroes simply earlier than the November last, whereas his picture was scrubbed from the present’s judging panel webpage.

A spokesperson for Alibaba advised the Financial Times that Ma might not be a part of the judging panel ‘on account of a schedule battle’.