Alibaba reported bumper results, but …

Alibaba reported bumper results in its latest quarter, but China’s online shopping giant faces turbulence ahead as the spread of coronavirus leaves some of its merchants without goods to sell, or couriers to make deliveries… Yesterday’s results mark Alibaba’s first financial report since coming home to China with a secondary stock listing in Hong Kong. The November listing raised $12.9 billion for the company and brought in thousands of new investors… Roughly two-thirds of all online sales in China transact across Alibaba’s Tmall and Taobao marketplaces, but the company faces rising competition from Shanghai-based Pinduoduo, which has rapidly amassed about three-quarters of Alibaba’s 711 million annual customers. Alibaba doesn’t sell any goods itself, instead it makes money by charging merchants on its platforms per-click fees to advertise their goods, and takes a cut on some sales… Like US tech giants Amazon and Microsoft, Alibaba’s push into selling online computer systems for other companies has brought rapid growth. Its cloud revenues have been growing at a rate of 60 per cent or more since early 2017 and rose 62 per cent year-on-year in the latest period. 

Ryan McMorrow