Alibaba Group (NYSE: BABA) released its financial results for Q4 and full FY2016/17 to end-March 2017. As for Tencent, which reported earnings earlier this week (our report here), all indications were extremely positive for the e-commerce and entertainment giant, as Alibaba’s revenue grew by 56 percent to RMB 158 billion ($22 billion U.S.) in FY2016/17 from FY2015/16, driven by expansion into new sectors.

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“We reported another excellent quarter, with revenue growth accelerating to 60 percent in Q4 of the current financial year from Q4 of the previous financial year. (This is) the highest growth rate we’ve achieved since our IPO. We also reported very strong full-year revenue growth of 56 percent, with an annual non-GAAP free cash flow of about $10 billion U.S.,” said Maggie Wu, chief financial officer of Alibaba Group.

Taobao, Alibaba’s new- and used-goods marketplace, performed well but lagged relative to the company’s less established ventures. The gross merchandise volume (GMV) transacted on Taobao Marketplace in FY2016/17 added up to RMB 2.2 trillion ($320 billion U.S.), an increase of “only” 17 percent year-on-year. In comparison, “core commerce”, Alibaba’s biggest segment, recorded 47 percent revenue growth to $4.6 billion U.S.. (What “core commerce” includes, isn’t clear. We’ll investigate and report – editor.)

Alibaba claims to have more than 500 million users across its various e-commerce platforms, and said revenue per user for “core commerce” increased by 36 percent to $10.10 U.S. from $7.40 year-on-year.

Taobao seems to be suffering from the ongoing negative press surrounding the fake, and even “lewd,” goods that are available there. Only this week, a lawsuit was filed against manufacturers of fake alcohol found to be sold on the platform (see Alizila). In December 2016, Taobao was unexpectedly listed by the U.S. Trade Representative’s Office (USTR) as a “notorious market” in its 2016 report, prompting a renewed campaign to clean up the platform.

Taobao has typically played big brother to brand-led marketplace Tmall, consistently running as much as double its GMV. Over the past two financial years, however, the gap closed, with Tmall’s GMV reaching RMB 1.5 trillion in the past year.

Nonetheless, Alibaba’s push to secure mobile users has been a success. Mobile GMV across Tmall and Taobao reached 79 percent of the total in the past year, up from 41 percent in FY2015/16. The report made no mention of Alibaba’s own Xian Yu stuff app (read this interesting article), or its recent acquisition of a minority stake in’s Zhuan Zhuan equivalent (which we reported on here).

Remarkably the 47 percent revenue growth recorded by “core commerce” made it Alibaba’s worst performing division in terms of relative growth. Revenue of the division cloud services grew 103 percent year-on-year and digital and media entertainment grew by a stunning 230 percent to RMB 14 billion.

As to be expected with growth stats such as the above, Alibaba’s shares have had a good year so far, rising almost 40 percent since the beginning of January.

Alibaba had the following to say about Taobao’s performance in Q4: The Taobao app’s highly relevant and engaging content continues to drive robust growth in active users and engagement. In the three months since December 2016, we added 14 million mobile active users (MAUs) on our China retail marketplaces, increasing MAUs to 507 million in March 2017. 

This strong mobile-user growth reflects our efforts to establish the Taobao app as a destination platform not only for shopping, but also for sharing product knowledge and lifestyle content, which drive effective user engagement and retention. During the quarter, we launched new features and content, continuing to offer enhanced and unique user experience on the Taobao app. For example, the “digital mirror” feature on the Taobao app allows consumers to virtually apply different shades of make-up. 

In addition, following the successful launch of its webisodes series in 2016, during this quarter Taobao aired “Night Warriors,” a new series of webisodes that promotes household products. This video campaign is part of Taobao’s larger effort to position itself as a lifestyle destination for consumers, especially younger shoppers.

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