Alibaba Group is predicting sales for the next financial year of US$91 billion with the Chinese e-commerce business in the belief that rapidly growing digital shopping transactions have been accelerated by the coronavirus pandemic.
Alibaba said last Friday that revenue for the company’s fiscal fourth quarter rose 22% to US$16.1 billion, although its operating profit fell 19% from a year ago. It told investors that it expected revenue growth of about 27% over the next 12 months, compared to 35% in the prior year.
Alibaba’s mobile users grew and sales for the company’s cloud computing business, which competes with similar services from Amazon, Google owner Alphabet and Microsoft, increased 58% from last year.
The performance of China’s economy, in which Alibaba is a key player, is being closely watched as a preview of how the rest of the world might fare following abrupt economic shutdowns aimed at controlling the spread of COVID-19. China is seven weeks ahead of the rest of the world and global business remains heavily fragmented. China’s government said earlier this week it would not set an economic growth target, the first time it has declined to do so since 1990.
The consumer commerce businesses of the Alibaba Digital Economy, mainly comprised of its China retail marketplaces, international retail marketplaces and local consumer services, reached US$1 trillion of Gross Merchandise Volume (GMV) in the twelve months ended March 31, 2020, Alibaba said in a press release.
“Alibaba achieved the historic milestone of US$1 trillion in GMV across our digital economy this fiscal year,” said Daniel Zhang, Chairman and CEO of Alibaba Group. “Our overall business continued to experience strong growth, with a total annual active consumer base of 960 million globally, despite concluding the fiscal year with a quarter impacted by the economic effects of the COVID-19 pandemic.
“The pandemic has fundamentally altered consumer behavior and enterprise operations, making digital adoption and transformation a necessity. We are well positioned and prepared to help large and small businesses across a wide spectrum of industries achieve the digital transformation they need to survive this difficult period and eventually prevail in the new normal. By focusing on the long term and investing in value creation for our consumers and business customers, we believe we will emerge from this crisis stronger and be ready to capture more growth in the future.”
JD.com, the second largest e-commerce platform in the country after Alibaba’s Taobao, posted first quarter 2020 results with revenues of US$120.6 billion, an increase of 20.7% from the first quarter of 2019.
“We are proud that JD.com has been able to remain fully operational throughout the COVID-19 outbreak, and our employees are proud of the contributions JD continues to make towards building a more productive and sustainable society,” said Xu Liu, Chairman and CEO of JD.com. “Strong user growth during the first quarter reflects consumers’ increasing reliance on JD.com to support every aspect of their lives, and confidence in our commitment to providing a broad selection of quality products and best-in-class services.”
JD.com on Wednesday announced a collaboration with short video platform Kuaishou to boost its live streaming exposure. The partnership comes ahead of China’s annual midyear 618 shopping festival.
“The retail industry is facing challenges and opportunities from the increasingly diverse consumer demands and consumption scenarios,” said Lei in a statement.
“Through the partnership, the two parties will provide consumers with a high-quality shopping experience,” he said.
JD.com has a live streaming platform and Kuaishou’s 300 million daily active users are expected to lift JD.com’s sales considerably.
“Short video live streaming e-commerce has seen rapid development as a new format in the industry,” Su Hua, Kuaishou CEO, said in a press release. “This partnership with JD.com will deliver a better shopping experience for Kuaishou users as JD Retail operates an industry-leading supply chain.”