Alibaba posted results that topped expectations as eCommerce sales continued to surge by double-digit percentages, and the company made strides in tapping consumers in less developed areas of the country.
The numbers seem to show that despite economic slowdowns and an ongoing trade war with the United States, the Chinese consumer is still spending.
In terms of headline numbers, the company said adjusted earnings for the fiscal first quarter came in at the equivalent of $1.83 USD, better than the $1.47 the Street had expected.
The overall top line was up 42 percent to 114.9 billion yuan; the Street had expected 111.6 billion yuan. Drilling down, the company said total core eCommerce sales stood at 99.5 billion yuan, which was up 44 percent and was better than the consensus of 95.9 billion yuan.
Alibaba said that at the end of the June quarter, the firm had 755 million mobile monthly active users (MAUs), which was up from 721 million a year ago. Annual active buyers across Alibaba’s retail operations were 674 million overall, as compared to the 654 million seen last year and an increase of 34 million over March of 2019.
In remarks during the conference call with analysts, Co-founder Joseph Tsai said the consumption trends are in place despite challenges to the broader economy posed by secular shifts in demographics and digitization. There has been particular strength in the emergence of a middle class in China’s countryside.
Adding a bit more granular detail on the retail activity, the firm said Taobao has been adding users and strengthening engagement in less developed areas. The company said more than 70 percent of the increase in annual active consumers came from less developed areas.
Management also said upon the earnings release that the GMV of physical goods was up 34 percent year over year in the quarter that ended in June, tied to strength in verticals such as apparel, consumer electronics and home furnishings.
Cloud computing gained 66 percent to 7.8 billion yuan.