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Alibaba performance beats forecast

Jane Xu

Research Analyst

Retail 29.08.2016 / 09:05

Buy+ lab 2 col

Revenue grows 59% year-on-year to US$4.8 billion, the highest growth rates since the IPO and beating consensus.

Alibaba Group has announced financial results for its fiscal first quarter ended June 30, 2016.

Revenue grew 59% year-on-year to US$4.8 billion, the highest growth rates since the IPO and beating consensus.

China Retail Marketplaces (including Taobao, Taobao Mobile, Tmall and Juhuasuan) revenue was 23.383 billion yuan (US$3.52 billion), an increase of 49% year-on-year. Mobile revenue of China retail marketplaces was 17.51 billion yuan (US$2.64 billion), an increase of 119% year-over-year, representing 75% of total China retail marketplaces revenue.

Annual active buyers increased to 434 million, up 18% YoY. Mobile MAUs in June reached 427 million, up 39% YoY.

Cloud computing revenue grew 156% YoY. Revenue up 286% YoY from digital media and entertainment segment which includes UCWeb, Youku Tudou, OTT TV service, Alibaba Music and Alibaba Sports.

Tencent becomes JD.com’s largest shareholder

From August 12 to August 18, 2016, Tencent Group increased their holding American Depositary Shares of JD by 8.02 million, which represents 16.03 million class A share of JD. With the latest share purchase, Tencent became JD’s largest shareholder, with 21.25% of JD’s total shares. Impacted by the share purchase, JD’s share price increased by over 2% to approximately US$26 before the US stock market opened on August 19, 2016.

On March 10, 2014, Tencent and JD.com reached a strategic alliance, in which JD issued new shares for Tencent and Tencent acquired 15% of the stake and another 5% when JD filed for an IPO.

After this share purchase, Richard Liu, founder and CEO of JD, holds 18.2% of the share of JD, but with over 80% of the voting right. Tencent has a 4% voting right due to the dual-class share structure.

Suning sales event orders up 312%

On August 19, 2016, Suning announced results from its annual August 18 Anniversary “Fever Festival” sale. The number of total orders increased 312% compared to last year, 81% of which were placed via mobile platforms.

In less than 12 hours, the order volume on the day exceed the previous year.

The number of customers who used Renxingfu, Suning Finance’s consumer credit program, increased 800% YoY.

Suning’s Half-Day delivery service covered 10 cities during “Fever Festival”, included Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Nanjing, Chengdu, Wuhan, Xi’an and Shenyang. The fastest delivery recorded by Suning was 22 minutes to a customer in Shanghai.

Suning also used social media and live broadcasting to celebrate and promote the Anniversary “Fever Festival” sale. Suning invited celebrities and other buyers to do 28 FBI (Fashion Buyer Investigation) live broadcasts on Suning APP’s social section to introduce Hero SKUs, resulting in an audience of 17 million people who “Liked” the broadcast.

VIP.com Q2 net revenue increases 49%

Vipshop reported unaudited 2016 second quarter financial results on August 16, 2016.

Total net revenue increased by 49.0% YoY to 13.4 billion yuan (US$2 billion), primarily driven by the growth in total active customers, repeat customers and total orders.

Gross profit increased by 44.0% YoY to 3.2 billion yuan (US$487.7 million). Gross margin was 24.1%, dropped from 25.0% in the prior year period. The decrease in gross margin was primarily due to the company's promotional activities that made the pricing more attractive to customers.

GMV from mobile rose to 87% in the second quarter, up from 76% one year ago.

The number of active customers for the second quarter of 2016 increased by 62% YoY to 23.0 million from 14.2 million.

The number of total orders for the second quarter of 2016 increased by 54% YoY to 68.9 million from 44.9 million.

Net profit attributable to Vipshop's shareholders increased by 13.1% YoY to 451.6 million yuan (US$68 million). Net profit margin attributable to Vipshop's shareholders was 3.4%, as compared with 4.4% in the prior year period. The decline is partly attributable to lower interest income as well as an 48.6 million yuan impairment loss of investments.

Non-GAAP net profit attributable to Vipshop's shareholders increased by 30.9% YoY to 677.5 million yuan (US$101.9 million). Non-GAAP net profit margin attributable to Vipshop's shareholders was 5.0%, as compared with 5.7% in the prior year period. This decline is primarily due to lower interest income.

New Hua Du returns to black

Fujian retailer New Hua Du released 2016 half year preliminary results for the period ended June 30 on August 18, 2016.

Their net revenue grew by 1.8 % YoY to 339.5 million yuan, driven by supply chain and cost efficiency improvement.

Net profit attributable to shareholders increased to 48.7 million yuan, from a net loss of 23.8 million yuan in the prior year period. The dramatic increase in net profit was due to shopping experience improvement and O2O development.

The company opened three stores in the first half of 2016. By the end of June, it operates 129 stores, including 120 hypermarkets and nine shopping malls.

Source: Kantar Retail

Editor's notes

* In the picture is Alibaba's Buy+ shop at a Shanghai exhibition on July 21. Alibaba's Gnome Magic Lab was presenting its virtual reality technology-based shopping experience.

* This article is based on Kantar Retail China Insight team's weekly newsletter (August 26). If you would like to receive Kantar Retail Newsletter, please send your email address to sherry.zhu@kantarretail.com.

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