Alibaba Group Holding Ltd, the Chinese e-commerce giant, has exceeded expectations with its quarterly revenue results amid the COVID-19 lockdowns. Due to the stay-at-home orders and the closure of physical stores during the pandemic, online orders skyrocketed. This surge in demand led to a significant increase of nearly 19% in Alibaba’s core commerce business, totaling 93.87 billion yuan ($13.16 billion) for the quarter. Additionally, the company’s cloud computing business also experienced a notable rise of about 58% in revenue.
These results have come as a surprise, as Alibaba had previously predicted a decrease in revenue. CFO Maggie Wu expressed her satisfaction with the better-than-expected performance and stated that the company anticipates generating over 650 billion yuan in revenue during fiscal 2021. One key contributing factor to Alibaba’s success is China’s early reopening of its economy compared to major economies in Europe and the United States, giving the company a significant advantage in the e-commerce market.
To stay ahead of competition from smaller rivals such as JD.com Inc and Pinduoduo Inc, Alibaba has been actively expanding into new businesses and investing in innovative technologies. Despite the challenges posed by the pandemic, Alibaba’s overall revenue reached 114.31 billion yuan ($16.02 billion) in the quarter ending on March 31, surpassing the previous year’s revenue of about 93.50 billion yuan. These results exceed analysts’ expectations of 107.04 billion yuan.
In another significant achievement, Alibaba announced that its gross merchandise volume has surpassed $1 trillion for the first time in its fiscal year ending in March. The company’s earnings per American Depository Share (ADS) were 9.20 yuan, exceeding analysts’ prediction of 6.10 yuan per ADS.
While celebrating its positive results, Alibaba’s CFO, Maggie Wu, expressed concerns regarding a bill passed by the U.S. Senate that would require listed companies to disclose whether they are owned by a foreign government. Though the bill applies to all foreign companies, it is specifically aimed at Chinese companies. Wu reassured stakeholders that Alibaba’s financial statements adhere to U.S. accounting regulations, emphasizing the company’s commitment to transparency.
Overall, Alibaba’s strong performance during the COVID-19 lockdowns highlights the increasing demand for online shopping as consumers turned to e-commerce for essential needs. With its expansion into new sectors and ongoing technological advancements, Alibaba is well-positioned to maintain its dominance in the Chinese e-commerce market and continue driving revenue growth in the years ahead.