Good Sunday afternoon! This is Xiaochun.
On May 4, tech behemoth Alibaba showed off its dominance in the e-commerce space to local competitors, announcing the highest revenue growth of its core e-commerce businesses since the company’s IPO in 2014.
In the fiscal year ended March 31, 2018, the Hangzhou-headquartered company generated US$34.12 billion in revenue from core e-commerce businesses, up 60% YoY. Putting that into context, Alibaba’s archrival JD reports a 40.3% growth in net revenue in its 2017 annual report.
Alibaba’s revenue growth is amazing, not only because it’s the highest since the company’s IPO, but also because the e-commerce giant is facing increasingly fierce competition from Tencent-backed enemies, JD and Pinduoduo. The latter is China’s fastest-growing e-commerce app that claims to have 300 million users and achieved a GMV of over 100 billion yuan (approx. $ 15.9 billion) by the end of 2017.
At the same time, Alibaba managed to grow its already huge number of annual active consumers to 552 million, an increase of 98 million from the 12-month period ended March 31, 2017.
In the global setting, Alibaba expects to benefit in long-term from its US$4 billion investment in Lazada, as it views Southeast Asia as a “very competitive market but is still in early stages of online retail penetration”, according to its newly released financial report.
Despite the considerable growth of revenue, Alibaba’s adjusted EBITA margin for core e-commerce businesses fell 9% to 53% in the fiscal year of 2018, predominantly due to the $4 billion capital injection in Lazada and its investments in new retail.
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