Alibaba Group Holding Limited announced its financial results for the quarter ended 31st December, 2019.
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“Alibaba Group experienced robust growth across our business this past quarter. Our digital economy reached new heights with another record 11.11 Global Shopping Festival for our merchants and partners. Continued investment in user engagement, especially through social commerce content, contributed to our strong gains in annual active consumers. As a result of its rapid growth, our cloud computing services for the first time generated revenue of over RMB10 billion in a single quarter. In response to
the coronavirus, we mobilized Alibaba ecosystem’s powerful forces of commerce and technology to fully support the fight against the outbreak, ensure supply of daily necessities for our communities and introduced practical relief measures for our merchants. No matter past, present or future, we remain true to our mission and we will support our merchants to overcome this challenging time together,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group.
“We had a successful listing on the main board of the Hong Kong Stock Exchange in November and delivered strong results for the quarter, with top-line revenue growth of 38% year-over-year and adjusted EBITDA growth of 37% year-over-year. Looking forward, we will remain dedicated to investing in digital infrastructure and services, supporting our customers and partners across the Alibaba Digital Economy, especially during the challenging time,” said Maggie Wu, Chief Financial Officer of Alibaba Group.
- In the quarter ended December 31, 2019:
Revenue was RMB161,456 million (US$23,192 million), an increase of 38% year-over-year.
Annual active consumers on our China retail marketplaces reached 711 million, an increase of 18 million from the 12-month period ended September 30, 2019.
Mobile MAUs on our China retail marketplaces reached 824 million in December 2019, an increase of 39 million over September 2019.
Income from operations was RMB39,560 million (US$5,682 million), an increase of 48% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 37% year-over- year to RMB55,880 million (US$8,027 million).
- Adjusted EBITA for core commerce was RMB58,075 million (US$8,342 million), an
increase of 26% year-over-year. Our marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, increased 22% year-over-year to RMB66,371 million (US$9,534 million).
Net income attributable to ordinary shareholders was RMB52,309 million (US$7,514
million), and net income was RMB50,132 million (US$7,201 million). Non-GAAP net
income was RMB46,493 million (US$6,678 million), an increase of 56% year-over-year.
Diluted earnings per ADS was RMB19.55 (US$2.81) and non-GAAP diluted earnings per
ADS was RMB18.19 (US$2.61), an increase of 49% year-over-year. Diluted earnings per
share was RMB2.44 (US$0.35) and non-GAAP diluted earnings per share was RMB2.27
(US$0.33), an increase of 49% year-over-year.
- Net cash provided by operating activities was RMB96,505 million (US$13,862 million)
and non-GAAP free cash flow was RMB78,279 million (US$11,244 million). Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
Looking at the results per business units, in December 2019, China retail marketplaces had 824 million mobile MAUs, representing a net increase of 39 million from September 2019. Annual active consumers on China retail marketplaces reached 711 million for the 12 months ended December 31, 2019, an increase of 18 million compared to 693 million for the 12 months ended September 30, 2019. Over 60% of new annual active consumers were from less developed areas.
Taobao continues to improve in content innovation and personalized recommendations to serve existing consumers and attract new ones. “Taobao Live,” where merchants and key opinion leaders (“KOLs”) use live-broadcast to market to their fans and customers, has become one of the fastest growing and an effective selling formats on our China retail marketplaces. In December 2019, GMV generated from Taobao Live and the number of monthly active users who watched Taobao Live both grew over 100% year-over-year.
Tmall continues to expand its leadership position as the consumer engagement and distribution platform of choice for brands in China. Tmall online physical goods GMV, excluding unpaid orders, grew 24% year-over-year in the quarter ended December 31, 2019, with strong growth in fast-moving consumer goods (“FMCG”) and consumer electronics. Our consumer segmentation initiatives have been well received by users as we continued to see strong order growth and higher purchase frequency.
Annual 11.11 Global Shopping Festival in the quarter was another record-breaking event, generating RMB268.4 billion (US$38.4 billion) in GMV settled through Alipay on retail marketplaces and consumer services platforms, up 26% year-over-year.
New Retail – Creating the New – Our self-operated grocery retail chain Freshippo (known as “Hema” in Chinese) continues to achieve solid same-store sales growth. Freshippo has been implementing multi-format retail strategies and introducing new initiatives to improve user experience and customer loyalty. As of 31st December, 2019, we had 197 self-operated Freshippo stores in China, primarily located in tier 1 and tier 2 cities. Alibaba will continue to invest in the growth of this business by, among other things, increasing Freshippo’s store density in existing cities in order to improve consumer coverage and delivery efficiency.
Transforming the Old – In September 2019, Tmall Supermarket launched a store-to-door business with Sun Art Retail Group to make half-day delivery of food and daily necessity products to consumers living beyond the catchment area of Sun Art’s stores.
The service marries Sun Art’s store-based inventories with Alibaba’s logistics infrastructure powered by Cainiao Network to better serve consumers that live within a 3-to-20 kilometer delivery radius of Sun Art’s stores.
Local consumer services – delivering strong growth in less developed areas by leveraging assets in the Alibaba Digital Economy. During the quarter, we continued to achieve strong growth in GMV driven by robust order growth. Alibaba continued to penetrate into less developed areas with strong growth potential and synergies with other businesses in the Alibaba Digital Economy. During the quarter, GMV from less developed areas grew about 40% year-over-year.
Alibaba leveraging the relationship with Ant Financial and other assets in the Alibaba Digital Economy to further benefit our local consumer services business. In the quarter ended 31st December, 2019, Ele.me acquired 48% of its new customers from the Alipay app.
Cainiao Network continues to focus on improving domestic and international one-stop-shop logistics services and supply chain management solutions to serve the Alibaba Digital Economy’s consumers and merchants. During the quarter, Cainiao Network’s revenue grew 67% year-over-year to RMB7,518 million (US$1,080 million). This revenue growth was primarily driven by increased merchant adoption of “Fulfilled by Cainiao” services from our fast growing cross-border businesses.
International – Lazada – the Southeast Asian e-commerce platform Lazada saw robust growth momentum in its marketplace business, driven by strong order volume growth and the doubling of quarterly active merchants year-over-year. Lazada recorded 97% year-over-year quarterly order growth reflecting strong consumer demand in the apparel and accessories and general merchandise categories.
Lazada’s user engagement programs and promotional campaigns, including the 11.11 Global Shopping Festival, drove strong mobile DAU growth during the quarter.
AliExpress – AliExpress continues to deliver robust user and GMV growth by leveraging our digital commerce technology and global logistics infrastructure. AliExpress continues to focus on increasing the number of high quality merchants that can offer price competitive products to meet the strong consumption demand of the marketplace’s international consumers. During the quarter, AliExpress saw robust merchant and consumer participation in the 11.11 Global Shopping Festival, which generated strong GMV growth of 46% year-over-year.
Initial Public Offering in Hong Kong
On November 26, 2019, Alibaba successfully listed ordinary shares on the main board of The Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”) with a global offering of 575,000,000 ordinary shares, comprised of an international offering and a Hong Kong public offering. The Hong Kong-listed shares are fully fungible with our American depositary shares (ADSs) listed on the New York Stock Exchange (“NYSE”) (one ADS representing eight ordinary shares). The gross proceeds from the global offering, before deducting underwriting fees and the offering expenses, were approximately HK$101.2 billion (US$13.0 billion). Alibaba plans to use these proceeds for the further implementation of our strategies to drive user growth and engagement, empower businesses to facilitate digital transformation and improve operational efficiency, and continue to innovate.