(Yicai Global) Jan. 31 -- Alibaba Group Holding saw revenue in the latest quarter top CNY100 billion (USD14.9 billion), making it the first among China's internet titans to breach the threshold. Its shares rose in New York.
Revenue gained 41 percent to CNY117.3 billion in the three months through December driven by the development of cloud computing and data technologies, the Hangzhou-based company said in an earnings report released yesterday. Net profit rose 37 percent to CNY3.4 billion.
Growth at Alibaba, China's biggest e-commerce company, stems from the power of its cloud computing and data technologies that are helping millions of companies speed their digital transformation, Chief Executive Daniel Zhang said.
About 40 percent of China's top 500 companies use Alibaba Cloud, as do nearly half of Chinese listed companies, and 80 percent of the country's tech firms, statistics show. Cloud computing is a long-term business focus and Alibaba founder Jack Ma has often said it's the future. The group has invested more than CNY43 billion in Alibaba Cloud over the past 10 years and the results are now gradually becoming apparent.
Alibaba's shares [NYSE:BABA] climbed 6.3 percent to close at USD166.82 each yesterday. That's the stock's highest level since September.
Alibaba Cloud's revenue grew 84 percent to CNY6.6 billion in the period. Its revenue reached CNY21.4 billion last year, passing the CNY20 billion mark for the first time. The figure was CNY11.2 billion in 2017.
Its China market share is equivalent to the sum of the firms ranking from the second to the ninth, and it has surpassed the cloud business of Google and IBM in the global market, according to Framingham, Massachusetts-based market intelligencer IDC.
During the quarter, revenue from Alibaba's core e-commerce business rose 40 percent to CNY103 billion and profit, as measured by adjusted EBITA or earnings before interest taxes, depreciation, and amortization, gained more than 20 percent to CNY46 billion.
The annual active consumer tally at e-commerce unit Taobao reached 636 million, a net increase of 35 million on the previous quarter. It was the sixth quarter of growth of over 20 million.
Taobao's dazzling performance rests on the innovations of countless small and medium-sized businesses, group CEO Zhang said. Their use of such innovative tools as live streaming helps better connects them to customers and boosts user numbers, Zhang said, adding that Alibaba strongly encourage them to do so.
A strong increase in consumption stems from young Chinese people's improving spending power, Zhang said. Forty-six percent of consumers in last year's Black Friday-style Tmall Double 11 shopping festival were born in the 1990s. "The younger generation of consumers is still the main force driving China's consumption growth," he said. The ranks of the country's middle-class consumers will double within five years, he added.
Tmall's Double 11 festival also contributed to group revenue. The 10th such event -- also known as Singles Day -- set a record of CNY213.5 billion turnover on a day last year.
Editor: Ben Armour