Published: Sun, August 18, 2019
Markets | By Otis Pena

Steady digital media and entertainment revenue growth for Alibaba

Steady digital media and entertainment revenue growth for Alibaba

"Alibaba had a great quarter, expanding our user base to 674 million annual active consumers, demonstrating our superior user experience", said Daniel Zhang, Chief Executive Officer of Alibaba. Diluted earnings per ADS was US$1.17 and non-GAAP diluted earnings per ADS was US$1.83, an increase of 56 per cent year-over-year.

The increase in customers on Alibaba's platforms allowed the Company to deliver a 204% year-over-year increase in income from operations, reaching RMB 24.37 Billion (USD 3.55 Billion). "The scale benefits are paying off and Alibaba is enjoying both active consumer growth momentum and higher average spend".

On Thursday, Alibaba reported that it managed to rake in revenues of around $16.7 billion, a significant increase from the $11.49 billion it reported during the same period past year.

The company said its China retail marketplace added rose to 674 million active customers, up 20 million from the 12-month period ended March 31.

The revenue result from the company represents how it is gaining share in Asia. During the quarter, Youku's average daily subscribers increased 40 percent year-over-year, helped by continued investment in original content. Alibaba said it was focusing more on ensuring a return on the content investment and managing costs, helping to reduce losses at the division in Q1.

The results bring more confidence to investors who have been increasingly skeptical about growth prospects for Chinese e-commerce companies.

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Its core e-commerce business grew revenues 44 percent to CNY 99.5 billion.

The question for Alibaba - and for China's leaders as the trade war grinds on - is how long that strength will last and whether it will be enough to blunt other headwinds.

Most of Alibaba's revenues are generated domestically, which means that it is not really affected by the wider disruptions in global trading.

Revenue from its digital media and entertainment business rose 6 percent to CNY 6.3 billion, with growth muted by increased regulatory scrutiny of online services in China.

Alibaba has been pouring money into what it calls "new retail", which optimises in-store sales and service using data culled online.

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