Alibaba saw revenue surge in the previous quarter as the Chinese e-commerce giant defied analyst expectations and fears of a slowdown in China’s economy.
The company posted a 42pc boost in revenue on Thursday for the three months to June, as its e-commerce and cloud computing businesses drove earnings to 114.9bn yuan ($16.3bn) from 80.9bn yuan in the same quarter the previous year.
The company’s shares climbed 3.3pc in pre-market trading as its core retail services, Tmall and Taobao, delivered a 44pc year-on-year increase in revenue, buoyed by increasing adoption of smartphones in the country and features such as personalised recommendations for shoppers. Its food delivery business, Ele.me, proved particularly popular, as revenue grew 137pc from the previous year.
Revenue in its cloud computing venture saw a sharp 66pc rise to 7.8bn yuan. The company expanded its cloud computing arm to the UK last year, launching data centres in London to meet rising demands and prepare rival services to those of Silicon Valley firms Amazon and Microsoft.
China has been under pressure in recent months as the ongoing trade war with the US has started to impact its economic outlook following tit-for-tat tariffs between the two countries.
But the figures from Alibaba indicate concerns have had little impact on consumer confidence, as the number of consumers actively using its e-commerce services rose by 20m to 674m in the 12 months to the end of March.
The results come as Daniel Zhang, who assumed the role of chief executive at Alibaba in 2015, is set to take on the additional role of chairman next month - a position currently held by the company’s founder Jack Ma.
Mr Zhang was the architect of Alibaba’s Singles’ Day, an annual, one-day shopping event which drew in $30.6bn in revenue for the company in 2018. All eyes will be on Alibaba’s chief executive ahead of this year’s event, as geopolitical uncertainties place pressure on global growth and yet threaten to waver consumer demand.
“This is both a challenge and opportunity for the Chinese economy,” Mr Zhang said on the earnings call.
Alibaba is thought to have drawn up plans for a secondary listing in Hong Kong, though the company has not confirmed the move, which would help it raise fresh funds of up to $20bn to take on domestic opponents such as Pinduoduo and Meituan Dianping.