Alibaba Group Holding Limited (NYSE: BABA) delivered a strong performance for the first quarter of 2021 with a 34% growth in revenues and an 18% growth in adjusted profits. The COVID-19 pandemic led to the increased adoption of digital technologies by both consumers and businesses which benefited both of Alibaba’s key businesses – ecommerce and cloud computing. This transformation has also opened up new opportunities for the company that are expected to drive growth going forward.
Annual active customers on Alibaba’s China Retail Marketplaces as of June-end stood at 742 million, reflecting a quarterly increase of 16 million. Mobile MAUs stood at 874 million. Tmall online physical goods GMV, excluding unpaid orders, grew 27% year-over-year. The company saw increases in purchase frequency and average spending per customer both sequentially and on a year-over-year basis.
Alibaba expanded its services further into less developed markets during the quarter and the disruption in international tourism created an opportunity for its import commerce business. Tmall Global GMV grew 40% year-over-year.
The company plans to focus on acquiring new customers in less developed markets and to work on reaching its mid-term goal of serving more than 1 billion Chinese consumers. Alibaba will continue to expand its product supply, particularly in categories that are under-penetrated by e-commerce.
Alibaba’s investments in its New Retail operations helped in accelerating the digitalization of its brick-and-mortar retail operations thereby improving its omni-channel capabilities. The company’s grocery business benefited from more customers moving to online shopping for groceries and other essentials. More than 60% of Freshippo’s GMV came from online.
Alibaba’s Southeast Asian ecommerce platform Lazada saw a 100% growth in order volume year-over-year. Several consumers have moved to online shopping due to the health crisis and the company believes this trend will continue to drive growth in ecommerce in the region over the long term.
“In this highly competitive region with Lazada’s new leadership in place, we aim to build a sustainable digital business, leveraging Alibaba’s technology to serve local consumers and the business partners. During the June quarter AliExpress, our cross-border export marketplace, saw order conversion and the delivery time negatively impacted by challenges in cross-border logistics, but the situation has started to improve in July.” – Daniel Zhang, Chairman and CEO
Amid the changes in the business environment, Alibaba saw higher demand for cloud infrastructure and services. Alibaba’s cloud computing revenue grew 59% year-over-year during the quarter. The company believes that as all industries undergo a digital transformation, all businesses will move to cloud and therefore expects the rapid growth in the cloud business to continue in the near and mid-term.
Based on third-party studies, the size of the China cloud market is estimated in the $15-20 billion range while the US market is about 8 times this number. So the China cloud market is at an early stage but it will be a faster-growing market compared to the US and Alibaba is optimistic about its prospects here.
Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!
Broadcom Limited (NASDAQ: AVGO) reported first quarter 2021 earnings results today. Total revenue increased 14% year-over-year to $6.65 billion. GAAP net income was $1.3 billion, or $3.05 per share, compared
Retail giant Costco Wholesale Corporation (NASDAQ: COST) reported higher earnings and revenues for the second quarter of 2021. Earnings missed analysts’ expectations, while sales beat. Net profit was $951 million
With the corporate world rapidly shifting to cloud-native computing after the virus outbreak changed work culture and the way businesses operate, technology providers are aggressively innovating their offerings. Hewlett Packard