In the quarter ending on June 30, Alibaba, the prominent Chinese e-commerce company, reported a 14% year-on-year increase in revenue. The company’s endeavors in global markets proved fruitful, evident in the remarkable 60% year-on-year surge in revenue from international retail commerce, amounting to 17.14 billion yuan during the same June quarter. CEO and Chairman Daniel Zhang expressed satisfaction with the performance, stating that Alibaba had achieved a robust quarter while effectively implementing their Reorganization strategy, which is progressively revitalizing various sectors of their business.
Alibaba, the prominent Chinese e-commerce giant, announced on Thursday that its revenue experienced a notable 14% year-on-year growth in the quarter ending on June 30. This marks the most substantial annual rise in sales since the quarter ending in September 2021, as indicated by data from Refinitiv.
In premarket trading, the company’s shares traded in the U.S. surged by 4.5%.
Here’s a breakdown of Alibaba’s performance in the June quarter compared to Refinitiv’s consensus estimates:
- Revenue: 234.16 billion yuan ($32.29 billion), surpassing the expected 224.92 billion yuan, demonstrating a 14% year-on-year increase.
- Net income attributable to ordinary shareholders: 34.33 billion yuan, exceeding the projected 28.66 billion yuan, showcasing a remarkable 51% year-on-year growth.
Alibaba’s primary business segments, Taobao and Tmall Group, observed a 12% year-on-year revenue uptick, reaching 114.95 billion yuan in the June quarter. The company highlighted that its Taobao online shopping app witnessed a 6.5% rise in daily active users in June compared to the previous year, which further escalated to over 7% in July.
Furthermore, Alibaba’s strategic expansion into international markets proved to be fruitful, with revenue from international commerce retail surging by an impressive 60% year on year, amounting to 17.14 billion yuan in the June quarter.
The surge in international demand also played a significant role in boosting revenue for Alibaba’s Cainiao logistics division, resulting in a 34% increase to 23.16 billion yuan during the corresponding period.
Alibaba’s cloud business witnessed a 4% growth in revenue, reaching 25.12 billion yuan. However, these figures were negatively impacted by a decline in revenue from key customers, along with a reduced demand for remote work, streaming, and educational services in light of the aftermath of the coronavirus pandemic, as stated by the company.
Allocating additional resources towards the advancement of AI in Alibaba.
Nevertheless, Alibaba reported a notable surge in demand within its cloud division for services centered around training artificial intelligence models and associated offerings. During a conference call with analysts on Thursday, the management stated, “We are of the belief that the growth prospects propelled by AI services are only in their infancy. The technological revolution catalyzed by AI is not a fleeting opportunity but rather the inception of a new era.”
In light of this, they underscored their intentions to increase investments in the advancement of AI technology and associated business avenues. Furthermore, during the earnings call, the management emphasized that the Taobao app possesses substantial potential to evolve into a comprehensive intelligent hub for daily life and consumption, bolstered by AI capabilities.
In the wake of the recent frenzy surrounding OpenAI’s ChatGPT, numerous Chinese companies have expedited their announcements about developing comparable products. Notably, ChatGPT remains officially unavailable in China. In the midst of regulatory uncertainties, the majority of similar AI offerings within China have directed their efforts toward collaborating with business partners, rather than introducing public-facing chatbot services.
Alibaba, for instance, unveiled its own expansive language model (ELM) named Tongyi Qianwen in April. An ELM is an artificial intelligence model extensively trained on massive datasets. This type of model forms the foundation for generative AI applications, similar to ChatGPT, which can produce responses resembling human-generated content when prompted by users.
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