Alibaba delivered second quarter with 61% revenue growth, a net increase of 17 million Taobao MAUs to 634 million, and a decrease of 54% in income from operations, according to its financial results for the quarter ended June 30, 2018.
Alibaba’s revenues for Q2 2018 totaled 80,920 million yuan (US$12,229 million), an increase of 61% year-on-year. Specifically,
- Revenue from core commerce increased 61% year-on-year to 69,188 million yuan (US$10,456 million)
- Revenue from cloud computing increased 93% year-on-year to 4,698 million yuan (US$710 million)
- Revenue from digital media and entertainment increased 46% year-on-year to 5,975 million yuan (US$903 million)
- Revenue from innovation initiatives and others increased 64% year-on-year to 1,059 million yuan (US$160 million)
While income from operations was 8,020 million yuan (US$1,212 million), a decrease of 54% year-on-year, which was due to a one-time increase in share-based compensation expense related to Ant Financial’s awards to the employees.
Net income attributable to ordinary shareholders was 8,685 million yuan (US$1,313 million), and net income was 7,650 million yuan (US$1,156 million), representing a year-on-year decrease of 41% and 45%, respectively. Adjusted EBITA for core commerce was 32,797 million yuan (US$4,956 million), an increase of 22% year-over-year, representing a margin of 47%.
Core commerce
Taobao
In June 2018, Taobao App had a quarterly net increase of 17 million MAUs on China retail marketplaces to a total of 634 million MAUs. Annual active consumers increased 24 million to 576 million for the 12 months ended June 30, 2018. Around 80% of the increase in annual active consumers were from lower-tier cities.
Taobao App provides a unique shopping experience with new, innovative content formats and intelligent personalized recommendations. Live-broadcast feature continues to be a fast-growing consumer social media engagement medium on the Taobao App.
Live-broadcast MAUs have grown over 100% year-over-year. Formats such as curated posts, short-form videos, and live-broadcast events continue to help brands engage with their customers on the platform, which in turn, drives purchase conversion and increases annual active consumers.
In early August, Alibaba launched “88VIP”, a new loyalty membership program to enhance consumer engagement and loyalty.
The exclusive membership offerings and privileges across the Alibaba ecosystem include discount savings on Tmall Supermarket, Tmall Global and brand stores on Tmall, coupons for consumer electronics, subscriptions to Alibaba’s video-streaming platform Youku and music-streaming platform Xiami, online movie tickets on Taopiaopiao, and on-demand delivery service from Ele.me.
Tmall
Tmall continued to gain wallet share and expand its B2C market leadership. Excluding unpaid orders, physical goods GMV grew by 34% year-on-year in Q2 2018.
Tmall gained further mindshare among domestic and international brands as the leading brand-building and distribution platform that is capturing increasing consumer exposure and spending by users in China.
During the quarter, international brands such as MCM, Moschino, and Giuseppe Zanotti launched flagship stores on Tmall and joined the Luxury Pavilion, the customized and premium shopping experience for consumers.
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By CIW Team