Advertise with fastmoving.co.za
 
 

The Alibaba Group posted quarterly revenue and earnings that topped analyst estimates as personalised recommendations drive consumer spending across its shopping sites.
The Alibaba Group posted quarterly revenue and earnings that topped analyst estimates as personalised recommendations drive consumer spending across its shopping sites.

Alibaba beats analyst estimates as recommendations boost sales

INTERNATIONAL NEWS

ByLulu Yilun Chen, Bloomberg - May 17th, 09:38

The Alibaba Group posted quarterly revenue and earnings that topped analyst estimates as personalised recommendations drive consumer spending across its shopping sites. 

Revenue at China’s biggest e-commerce company rose 51% to 93.5bn yuan ($13.6bn) in the three months ended in March, the company said. That compares with the 91.7bn-yuan average of analysts’ estimates compiled by Bloomberg. Adjusted earnings-per-share was 8.57 yuan, topping projections for 6.5 yuan.

The Hangzhou-based company predicted revenue in the current financial year of more than 500bn yuan. Recommendations to users based on their preferences are now driving more sales than traditional search, boosting Alibaba’s ability to provide targeted advertising for merchants on its main Taobao platform.

That’s helping the e-commerce operator generate more revenue at a time escalating U.S.-Chinese tensions threaten to dampen the world’s number two economy.

The "testing of new recommendation-based advertising indicates monetization will kick in soon, supporting faster earnings recovery," Binnie Wong, a Hong Kong-based analyst with HSBC, said in a report ahead of the results.

The new features could help improve the conversion rate for merchants, Wong wrote.

Shares of Alibaba rose 2.8% to $174.84 in New York on Tuesday, before the earnings were announced. The stock has gained 28% compared with an 11% gain for the NYSE Composite Index.

Rival Tencent Holdings Ltd. posted earnings that topped estimates even as revenue growth slowed to the lowest since its 2004 initial public offering.

Alibaba’s full-year revenue rose 51% to 376.8bn yuan, toward the bottom of its forecast range of 375-383bn yuan.

The core commerce business posted revenue of 78.9bn yuan, a jump of 54%.

Revenue from the cloud unit surged 76% to 7.7bn yuan, the company said. The business is becoming a key pillar of growth, with more than half the market in China.

The cloud business could post growth of 46% per year through 2022, according to Bernstein estimates.

In Asia, Gartner forecast that Alibaba last year accounted for 19.6% of the Asian market for infrastructure as a service and infrastructure utility services, two of the most popular forms of cloud business.

That means its regional market share rose by nearly a third from 2017, while Amazon’s fell slightly to 11%.

Sales from the digital media entertainment unit rose 8% to 5.7bn yuan.

Fin24 

Read more about: sales | jack ma | china | alibaba

Related News

Shoemaker Vans treads wearily as China fumes over Hong Kong
09/10/2019 - 13:20
US sports brand Vans has removed “a small number” of submissions in a sneaker design competition including one apparently giving a shout out to Hong Kong’s pro-democracy protests, as companies weigh the risks of angering China.

De Beers diamond sales fall 39% in a year
03/10/2019 - 09:28
De Beers’s diamond buyers continued to take the rare opportunity to reject stones from the biggest supplier as the company extended almost unprecedented flexibility to ease a growing crisis.

Woolworths CEO receives R190m since disastrous deal Down Under
01/10/2019 - 09:22
Despite spearheading an ill-fated foray into Australia, Woolworths CEO Ian Moir pocketed R23m in the past year. This brings his total earnings over the past five years to R191m.

Retail sales remain muted with consumers under pressure
20/09/2019 - 14:31
Retail sales for July marginally declined to 2 percent year on year as sales growth continued to reflect a muted demand in South Africa, with consumers’ discretionary income under strain.

Rhodes Food Group's turnover rises amid healthy international growth
16/09/2019 - 11:14
The international turnover of Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, rose 13.4% in the 10 months to end-July, boosted by a weaker rand and exports of fruit snacks to the US.