Despite a slowdown in the Chinese economy, Alibaba Group Holding Limited surpassed analysts’ expectations in its second quarter earnings. The e-commerce giant managed to add more users to its platform as mobile sales and cloud computing business continued to grow.
For the period ended June 30, Alibaba posted revenues of $4.8 billion, an increase of 59% on a year-over-year basis. Analysts expected the company to report revenues of $4.54 billion, which it easily surpassed.
Earnings for the company were $0.74 per share, exceeding analysts’ expectation of $0.63 per share. Revenue from retail marketplaces for the company was $3.51 billion, an increase of 49% compared to the same quarter last year.
Mobile revenue from Chinese retail marketplaces soared to $2.6 billion, increasing by an astonishing 119% on a year-over-year basis and accounting for almost 75% of the total revenue earned by marketplaces in China. This is the first time that Alibaba has broken down its revenue by segments.
The company said this was the highest growth rate it had achieved since going public. Annual active buyers for the company grew by 18% to 434 million while monthly active users stood at 427 million, an increase of 39% on a YoY basis.
“Alibaba Group had an outstanding quarter. Our results show the scale and leverage of our ecosystem, as we strengthen our competitive positions in core commerce, cloud computing and digital media and entertainment,” said Daniel Zhang, Chief Executive Officer of Alibaba Group. “The acceleration of our revenue growth reflects the deep value propositions that we bring to our customers.”
Alibaba has been trying to focus more on its cloud computing business and the recent result of the division would encourage the e-commerce giant to invest more in that segment. It posted revenues of $187 million with a whopping 156% increase on a year-over-year basis.
The increase in revenue was driven by a rise in paying customers from 263,000 to 577,000 during the period. However, in order to compete with the likes of Amazon, it still needs to do a lot more as the US e-commerce company earned $2.6 billion from its cloud business.
Alibaba has been looking to add more sources to its revenue stream as its online marketplace moves toward saturation in China. The company also made its biggest overseas acquisition by acquiring Lazada for $1 billion, which helped it gain access to six South Asian markets. It has been investing in cloud computing companies and driverless cars as well.