Alibaba Group Announces September Quarter Results

Alibaba Group
(Source: Alibaba)

Chinese internet and e-commerce giant Alibaba Group on Thursday announced its financial results for the fiscal quarter ended September 30, 2021. During the period, Alibaba’s revenue was 201 billion yuan ($31 billion), an increase of 29% year-on-year. Excluding the consolidation of Sun Art, its revenue would have grown 16% year-on-year to 180 billion yuan.

Aggregate revenue of its international commerce retail and international commerce wholesale was 15 billion yuan, an increase of 34% year-on-year. Its cloud computing revenue was 20 billion yuan, an increase of 33% year-on-year.

Its net income attributable to ordinary shareholders was 5.4 billion yuan and net income was 3.4 billion yuan. Non-GAAP net income was 29 billion yuan, a decrease of 39% year-on-year.

“This quarter, Alibaba continued to firmly invest into our three strategic pillars of domestic consumption, globalization and cloud computing to establish solid foundations for our long-term goal of sustainable growth in the future,” said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. “Our global annual active consumers across the Alibaba Ecosystem reached approximately 1.24 billion, with a quarterly net increase of 62 million consumers, and we are on track to achieve our longer-term target of serving two billion consumers globally.”

In a conference call after the financial report’s release, Zhang said that Alibaba remains committed to serving 2 billion consumers globally as its long-term strategic goal and is confident of achieving the target of 1 billion annual active consumers in China by the end of this fiscal year.

Annual active consumers (AACs) of the Alibaba Ecosystem across the world reached approximately 1.24 billion for the twelve months ended September 30, 2021 – an increase of approximately 62 million from the twelve months ended June 30, 2021. This includes 953 million consumers in China and 285 million consumers overseas, representing a quarterly net increase of 41 million and 20 million, respectively.

Commerce

For the twelve months ended September 30, 2021, there were approximately 863 million AACs on Alibaba’s China retail marketplaces and new retail businesses, with an increasing percentage of new consumers from lower-tier cities.

Taobao Deals (淘特, Táo Tè) continues to exhibit robust user growth by providing consumers with more high quality, value-for-money products, enriching food and beverage offerings sourced from Alibaba’s Community Marketplaces business, reducing delivery costs, as well as improving the delivery experience for consumers in lower-tier cities. For the twelve months ended September 30, 2021, there were over 240 million AACs on Taobao Deals with an increasing percentage of new consumers from lower-tier cities.

The 11.11 Global Shopping Festival this year generated 540.3 billion yuan in GMV, excluding unpaid orders. Among the record 290,000 brands that participated in the festival this year, 65% are small- and medium-sized businesses, manufacturers from industrial belts and new brands. In addition, a dedicated eco-friendly vertical on Tmall featured 500,000 products with official Green Product Certification from more than 2,000 merchants.

Local Consumer Services

During the quarter, Ele.me, a food delivery platform under Alibaba, continued to invest in user acquisitions and user experience enhancements that resulted in strong AAC growth of 28% year-on-year. Order volume growth was also strong at over 30% year-on-year, with increasing percentage from non-restaurant orders, driven by fast growth in the number of merchants as well as by user penetration. Order growth was particularly strong in the grocery and healthcare categories.

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Cainiao Network

Cainiao Network, a logistics platform under Alibaba, continues to expand its global infrastructure by strengthening its end-to-end logistics capabilities, including international freight service, destination warehousing and fulfilment, and last-mile delivery service enablement. As of September 30, 2021, Cainiao operated over 3 million square meters of warehouses dedicated to cross-border businesses.

Cainiao Post continues to expand its coverage into less-developed areas of China to improve delivery efficiency. As of September 30, 2021, Cainiao Post covered more than 1,000 counties and towns in less-developed areas of China with the number of daily packages handled in these markets growing over 280% year-on-year.

International Commerce

In September 2021, Alibaba’s international commerce retail business, mainly including Lazada, AliExpress, Trendyol and Daraz, grew rapidly to achieve approximately 285 million AACs in the twelve months ended September 30, 2021, representing a quarterly net increase of 20 million. Both international commerce retail and international commerce wholesale demonstrated a robust growth in the September quarter, with aggregate year-on-year revenue increase of 34% to 15 billion yuan.

Cloud Computing

In the September quarter, Alibaba’s cloud computing revenue grew 33% year-on-year to 20 billion yuan, primarily driven by strong growth in revenue from customers in the internet, financial services and retail industries.

During the 2021 Apsara Conference held in October, Alibaba unveiled several new products and technology upgrades, including the Yitian 710 Server Chip and X-Dragon Architecture.

Alibaba Cloud continues to be the top-ranking cloud relational database operator in China, according to IDC’s 2020 China Relational Database Market Research Report. Alibaba Cloud also announced the new operating system Anolis OS. Anolis OS is completely open-source and provides services through vendors and community. Alibaba Cloud plans to invest 2 billion yuan in Anolis OS that provides technology and services to its ecosystem.

Digital Media and Entertainment

In the September quarter, Alibaba’s video platform Youku’s daily average subscriber base increased by 14% year-on-year, driven primarily by more quality content and continued contribution from the 88VIP membership program.

Alibaba Pictures has consistently shown a solid track record in content investment and distribution. For example, Alibaba Pictures participated in the production and distribution of almost all of China’s major box office hits during the Golden Week holiday in October.