Alibaba Runs up Large Gains in Q2

The China, Hangzhou-based Alibaba Group which is said by some to be alongside Amazon as the number two e-commerce giant, has delivered what they term as “outstanding” results for Q2 2016.

Alibaba headquarters in Hangzhou  -  company courtesy
Alibaba headquarters in Hangzhou - company courtesy

Revenues go up - net earnings drop
The Alibaba second quarter results showed a distinct disparity between revenues earned and actual net income.
Total revenue for Q2 amounted to US$4.83 billion which represents a staggering 59 percent increase compared to Q2, 2015.
However, net income fell by a massive 77 percent down to US$1.07 billion.
It should be noted however that the 2015 net income was positively affected by one-off profits which came from the sale of investments.
This was not the case in Q2 this year.

Alibaba’s retail commerce business on the Chinese mainland generated most of the revenues as was the case in the first quarter.
Retail commerce brought a total of US$3.5 billion into the company coffers. This is 73 percent of Alibaba’s total revenue and was up by 49 percent over the same period 2015.

Gaining a foothold in the international e-commerce market
Slowly but surely, the Alibaba Group continues to strive for a foothold in the international commerce scene.
Revenues in this sector totaled US$168 million in Q2 which year-on-year represents a 123 percent increase.
The company claims that it got a better foothold in Q2 with merchants in the U.S., Europe, Australia and New Zealand, as well as in Korea and Japan.
The main commodities sold in these sectors were health care, personal and food items.

Alibaba CEO Daniel Zhang who has been at the helm since 2015 seems happy with the results so far this year. he stated that “our results show the scale and leverage of our ecosystem, as we strengthen our competitive positions in core commerce, cloud computing and digital media and entertainment.”
He added that “the acceleration of our revenue growth reflects the deep value propositions that we bring to our customers.”

Cainiao Network Logistics remains steady
The Alibaba logistics and parcels delivery platform is seemingly also getting a stronger foothold in the Chinese domestic market.
Figures show that up to 42 million packages are delivered daily by the Cainiao delivery stations throughout China. These now total 180,000 and are manned by 1.7 million staff who are supplied by Cainiao’s network partners.

Maggie Wu, Alibaba CFO says “we passed an important milestone this quarter in achieving higher monetization of mobile users than non-mobile users for the first time, reflecting the success of our strategy to stay ahead of the curve by embracing mobile.”

How long before the Alibaba group is dancing in Amazon’s playground?

John Mc Donagh

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