Alibaba Sales Beat Estimates on Surging Chinese Consumer Demand

Alibaba Sales Beat Estimates on Surging Chinese Consumer Demand

Alibaba Group’s quarterly revenue beat analysts’ estimates, powered by Chinese consumers’ thirst for cheaper and higher quality goods online, according to Bloomberg.

Revenue at China’s biggest e-commerce company rose 56 percent to 50.2 billion yuan ($7.4 billion) in the three months ended June, the company said. That compares with the $7.2 billion average of estimates compiled by Bloomberg. It reported non-GAAP diluted earnings-per-share of $1.17, versus the $0.94 projected.

Alibaba bolstered its dominance in e-commerce by improving the advertising algorithms it uses to generate revenue from brands trying to reach the 466 million active consumers on its online platforms. That is buying time for Chairman Jack Ma to venture into traditional retail, a sector he wants to revamp via experiments like HeMa Supermarket, a fresh foods store that comes with an additional cooking service and provides online grocery delivery.

Revenue from its core commerce operation climbed 58 percent to $6.3 billion, while cloud revenue almost doubled to $359 million as paying customers for the business surpassed 1 million for the first time. Shares of Alibaba have gained 82 percent this year compared with a 7.3 percent gain for the NYSE Composite Index.