Retail in Asia

In Trends

Alibaba revenues inch forward despite Covid, supply chain woes

Alibaba Group Holding Limited announced on Thursday revenues for the quarter ending December 31 increased 2 percent year-over-year, to RMB 247 billion (USD 36 billion).

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For the quarter, online physical goods GMV generated on Taobao and Tmall, excluding unpaid orders, declined mid-single-digits year-over-year, mainly due to soft consumption demand and ongoing competition as well as a surge in Covid-19 cases in China that resulted in supply chain and logistics disruptions in December.

The declining GMV was driven by weakening demand in fashion and accessories category, which was partially offset by accelerating growth for healthcare, pet care and fresh produce, as well as narrowing decline for consumer electronics category, the company said.

Taobao Deals continued to help an expanding base of manufacturers to sell directly to consumers (M2C) and, in the December quarter, paid GMV of M2C products grew more than 35 percent year-over-year on Taobao and Taobao Deals. Taocaicai continued to drive category penetration in high purchase frequency categories of groceries and fresh produce on Alibaba’s China retail marketplaces. During the quarter, both Taobao Deals and Taocaicai continued to narrow losses year-over-year by optimising user acquisition and improving overall operating efficiency, the company added.

Internationally, the combined order growth of Lazada, AliExpress, Trendyol and Daraz was 3 percent year-over-year, primarily driven by the robust order growth of Trendyol.

Net income was RMB 45.7 billion (USD 6.6 billion), an increase of 138 percent or RMB 26.5 billion year-over-year, primarily due to a RMB 22.4 billion decrease in impairment of goodwill in relation to Digital media and entertainment segment.

“We delivered a solid quarter despite softer demand, supply chain and logistics disruptions due to impact of changes in Covid-19 measures,” said Daniel Zhang, chairman and chief executive officer of Alibaba Group.

“During the past quarter, we continued to improve operating efficiency and cost optimization that resulted in robust profit growth,” said Toby Xu, chief financial officer of Alibaba Group.

“Our net cash position remains strong and we continue to generate healthy cash flow. During the quarter ended December 31, 2022, we repurchased 45.4 million ADSs for approximately US$3.3 billion under our share repurchase program as part of our ongoing commitment to improve our shareholder return.”

Looking ahead, the company said it expects continued recovery in consumer sentiment and economic activity.

“We are focused on driving growth for our customers amid the competitive landscape, and creating sustainable, long-term value for our shareholders,” added Zhang.