Alibaba's growth can't be stopped
Alibaba's quest for global ecommerce domination is right on track.
The Chinese Internet conglomerate had 307 million annual active buyers on its retail marketplaces at the end of September, a jump of 52% from the same period last year. That's a gain of 105 million users, which is equal to roughly one third the population of the United States.
The figures were revealed in Alibaba (BABA, Tech30)'s earnings report Tuesday, its first as a public company since the record-setting September IPO. Shares rose almost 2% in morning trading.
The company also stepped up its mobile game last quarter, having added 91 million active mobile users since the third quarter of 2013. And it's actually making money of those customers, with mobile revenue skyrocketing over 1,000%.
Alibaba's overall revenue soared 54% to over $2.7 billion, which was better than Wall Street forecasts of $2.6 billion. The company earned 45 cents per share, which was in line with expectations.
The company also shelled out a bit more on sales and marketing expenses, which ate into its revenue pie. Alibaba said the increase was due to heavy advertising spending to promote the online marketplaces in China.
Henry Guo, an analyst with JG Capital, said investors are concerned about slightly thinner margins in the third quarter in contrast to a year ago. And he thinks there's a sense that Alibaba's management is more focused on growing revenue and market share than improving the bottom line right away.
Still, he said Wall Street is by and large impressed by the earnings report.
Alibaba shares have been bid up since its IPO in anticipation of strong earnings. The stock is up about 10% from its first day closing price, and trades at 45 times forecast earnings for the fiscal year ending in March 2015.
How Alibaba makes money
The company's largest digital marketplace -- Taobao -- allows consumers to buy directly from small businesses. Tmall, Alibaba's other major marketplace, connects larger brand retailers to consumers.
Related: Battle of the billionaires: Jack Ma vs. Warren Buffett
Alibaba makes money on Taobao by selling advertisements and search placement to retailers. The company takes a commission from the larger retailers on Tmall. The company's fat profit margins are among the best in the industry.
In the run-up to the IPO, Alibaba shelled out billions to expand its digital empire, acquiring a mapping company and making a move into entertainment.
Some analysts argue that Alibaba now needs to concentrate on its core business. While it enjoys a dominant position now, competition is increasing. JD.com (JD), another prominent Chinese e-commerce company that went public earlier this year, is also doing well. And it has the backing of Chinese social media giant Tencent.
All three companies are putting an emphasis on mobile as more and more consumers use smartphones to communicate and shop -- functions that were previously done with desktop computers.
Alibaba's growth can't be stopped
By Jesse Solomon @JesseSolomonCNN November 4, 2014: 10:01 AM ET
北京ＡＰＥＣ会場でネット規制解除11月4日 22時44 ＡＰＥＣ＝アジア太平洋経済協力会議が開催される中国・北京の会場では、国内で実施しているインターネットの規制が解除され、中国政府は外国メディアの批判の材料を減らしたいねらいがあるものとみられます。
北京で今月１０日から開かれるＡＰＥＣの首脳会議を前に、一部の会場では４日から外国メディアの立ち入りができるようになりました。
このうち会場のプレスセンターでは、中国政府によって国内で閲覧が制限されているウェブサイトも見ることができ、中国では利用が規制されている世界最大の交流サイト、フェイスブックやツイッターにも接続できます。
これについて中国外務省の華春瑩報道官は会見で、「中国はＡＰＥＣ首脳会議のホスト国であり、関係部門は会議の成功のため、すべてにわたり全力を挙げてよい条件を提供する」と述べて、メディア向けにインターネットの規制を解除したことを明らかにしました。
中国政府は、今回のＡＰＥＣで各国から多くのメディアが訪れることから、規制を解除する異例の措置をとることで、外国メディアによる批判の材料を少しでも減らしたいねらいがあるものとみられます。
中国では体制批判につながるようなインターネット上の書き込みが削除されるなど、厳しい監視や規制が行われていて、今回も会場の外ではインターネットの規制は解除されていません。
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