Alibaba gets lockdown revenue boost as US threat looms
Alibaba today posted better-than-expected revenue and profit in its latest quarter as the coronavirus lockdown boosted trading in its core ecommerce business.
The Chinese conglomerate booked revenue of 135.8bn yuan (£14.9bn) in the three months to the end of June, up 34 per cent on the same period last year.
Net income also jumped from 21.3bn yuan to 47.6bn yuan, recovering from a weak first quarter when market volatility slashed the group’s investment income.
The buoyant results were fuelled by increased demand for Alibaba’s ecommerce services during the coronavirus lockdown.
The group’s China retail marketplaces — which include Tmall and Taobao — had 874m mobile monthly active users in June, representing a quarterly net increase of 28m.
Alibaba also posted sharp growth in its cloud computing division, where revenue jumped 59 per cent year on year to hit 12.3bn yuan.
Chief executive Daniel Zhang hailed an “excellent” set of results, adding: “We were well positioned to capture growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations.”
Alibaba’s New York-listed shares ticked up less than one per cent in pre-market trading.
But the results come against the backdrop of heightened tensions between Beijing and Washington as US President Donald Trump puts Chinese tech companies in his sights.
Trump, who has already announced a ban on Tiktok and Wechat, has hinted his administration is considering taking action against more Chinese firms, including Alibaba.
However, Andy Halliwell, retail analyst at Publicis Sapient, said Alibaba was less vulnerable than some of its Chinese counterparts due to its heavy domestic focus.
“It has much less dependence on the US for its growth and revenues, and is more focused on places like Singapore and the South China Seas region,” he said.
“It’s easy to see Alibaba quickly growing to take its place alongside Apple, Amazon, Alphabet and Microsoft as a trillion dollar business, and perhaps even out-pacing some of its rivals in its growth.”
Alibaba is also facing increased competition from domestic rivals. Earlier this week JD.com posted better-than-expected quarterly revenue figures, while Pinduoduo is set to report its second-quarter results on Friday.