Alibaba Q3 2019 results: revenue up +38%YoY

Jiong-Jiong Yu
Senior Retail Analyst

Date : 14 February 2020

Alibaba has announced its Q3 results for the three months ending 31 December 2019. Revenue increased by +38%YoY to CNY161bn (US$23bn).

Growth driven by core commerce and cloud computing

"Alibaba Group experienced robust growth across our business this past quarter," said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. Top line figures are:

  • Total revenue up +38% to CNY161bn (US$23bn)
  • Core commerce revenue also up by +38%, reaching CNY142bn (US$20bn), of which:
    • Customer management revenue +23%YoY
    • Commission revenue +16%YoY
    • Other (including new retail and direct sales businesses) revenue +128%YoY
  • Digital media & entertainment revenue +14%YoY, reaching CNY7bn (US$1bn)
  • Cloud computing revenue +62%YoY to CNY11bn (US$1.5bn)

The overall strong growth was attributed to good performance of its core commerce business and cloud computing. Its 11th 11.11 Global Shopping Festival set a new GMV record of CNY268bn. This is equivalent to 2.3 times the combined online sales of Black Friday and Cyber Monday in the US.

Active users: solid growth and engagement

Annual active consumers on China retail marketplaces reached 711m, an increase of 18m during the quarter. More than 60% of them were from less developed areas.

Mobile MAUs reached 824m in December 2019, an increase of 39m from September 2019.

Taobao: live-broadcasts fast growing

"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 Alibaba’s 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.

New Retail: new business model to transform physical stores

Creating the New: implemented as a multi-format retail strategy and a way of introducing new initiatives to improve user experience and customer loyalty, Freshippo continues to achieve solid same-store sales growth. Currently there are 197 Freshippo stores in China, mainly in tier 1 and tier 2 cities. There are plans to increase Freshippo’s store density in existing cities 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 enable half-day delivery. The service marries Sun Art’s store-based inventories with Alibaba’s logistics infrastructure powered by Cainiao Network to better serve consumers living outside catchment areas of Sun Art stores

Local consumer services: delivering strong growth in less developed areas

The group continues to drive development in lower tier cities through synergy of businesses in its ecosystem. In the quarter ended December 31, 2019, acquired 48% of its new customers through Alipay app.

Logistics Service: Cainiao Network increasing fulfilment solutions

Cainiao Network continues to focus on improving domestic and international one-stop-shop logistics services, with the following highlights:

  • Revenue up by 67%YoY to CNY7.5bn (US$1bn), driven by increased adoption of “Fulfilled by Cainiao” services from fast growing cross-border businesses
  • Delivered a record 1.29 bn packages during 2019 11.11 Global Shopping Festival. 362m packages were picked up at its stations around the country, up 88%YoY
  • In November 2019, Alibaba made an additional investment of CNY23.0 bn (US$3.0 bn) to increase its equity stake in Cainiao from 51% to 63% to strengthen its smart logistics network

International: strong growth in global markets

Lazada: 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-on-year. Lazada recorded 97% YoY quarterly order growth, reflecting strong consumer demand in the apparel and accessories and general merchandise categories

AliExpress: 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. In October 2019, the group formed a joint venture with Group, MegaFon and Russian Direct Investment Fund ("RDIF")


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