Chinese eCommerce giant Alibaba said it plans to seek growth in new international markets after closing the books on a record year that saw it topping 1 billion active users and doing a record $1.2 trillion of gross merchandise value sales on its platforms.
For the three months ending March 31, Alibaba said its massive digital buyer base grew to 892 million retail consumers domestically with the remaining 20 percent, or 240 million users visiting its sites from outside China.
In total, the company said its mobile active user base grew 23 percent to 925 million for its fiscal fourth-quarter and full-year reporting period.
“Such achievements were built on top of clear value propositions that we offer to consumers and merchants,” Alibaba Chairman and CEO Daniel Zhang said, citing the company’s strong growth and healthy foundation. “We remain very excited about the growth of China’s consumption economy, which is benefiting from the acceleration of digitalization in all aspects of life and work [and] we will continue to focus on customer experience and value creation through innovation, as we pursue our mission to make it easy to do business anywhere in the digital era.”
The Amazon Of China
Like rival Amazon in the U.S., Alibaba has an active, growing and highly profitable media and entertainment platform as well as a cloud computing business, the latter of which it said is now ranked third globally and first in the Asia Pacific region.
After growing 50 percent for the year, Alibaba said its latest Q4 cloud computing revenue growth rate slipped to 37 percent.
“The slower revenue growth during the quarter was primarily due to revenue decline from a top cloud customer in the internet industry. This customer, which has a sizable presence outside of China that used our overseas cloud services in the past, has decided to terminate the relationship with respect to their international business due to non-product related requirements,” the company said without providing further specifics.
Seeking New Markets
Alibaba said its core domestic retail businesses saw increasing engagement and high retention of its existing consumer base where average annual spending topped the equivalent of $1,400 for the first time.
“The longer a consumer has shopped on our platforms, the more they spend through more orders across more product categories,” the company said.
Still, with roughly 20 percent of its user base existing in its Lazada and AliExpress international division, Alibaba said it was looking to build on the strong growth which saw triple-digit order growth over the past 12 months.
According to CFO Maggie Wu, Alibaba expects to generate over $145 billion in revenue this year, up about 30 percent from 2021, and will be looking to new places to find it.
“Given the market potential and our proven profit and cash flow generation capabilities, we plan to use all of our incremental profits and additional capital in fiscal year 2022 to support our merchants and invest into new businesses and key strategic areas that will help us increase consumer wallet share and penetrate into new addressable markets,” Wu said.
The U.S.-traded shares of Alibaba have fallen about 30 percent since hitting an all-time high in November and reduced the eCommerce giant’s market value to $590 billion.
May 13, 2021 at 04:00PM