- Results beat projections on both the top and bottom lines
- Cloud revenue doubles but media climbed just 30 percent
Alibaba Group Holding Ltd.’s quarterly revenue beat analysts’ estimates, powered by Chinese consumers’ thirst for cheaper and higher quality goods online.
Revenue at China’s biggest e-commerce company rose 56 percent to 50.2 billion yuan ($7.4 billion) in the three months ended June, the company said. That compares with the 47.9 billion yuan average of estimates compiled by Bloomberg. It reported non-GAAP diluted earnings-per-share of $1.17, versus the $0.94 projected.
Alibaba bolstered its dominance in e-commerce by improving the advertising algorithms it uses to generate revenue from brands trying to reach the 466 million active consumers on its online platforms. That is buying time for billionaire Chairman Jack Ma to venture into traditional retail, a sector he wants to revamp via experiments like HeMa Supermarket, a fresh foods store that also provides online grocery delivery.
“The big data driven algorithm provides a good balance between merchants’ ad budget” and user preference, Barclays Capital Inc. analyst Gregory Zhao said in a report before the earnings. “While core commerce is the engine for Alibaba’s near-term growth, new retail is expected to shape Alibaba’s business model in the long run.”
Shares of Alibaba rose 5 percent in pre-market trade…