Alibaba Group Holding, China’s largest e-commerce company, reported Friday that third quarter sales rose 40% while profits nearly tripled, outperforming market expectations and defying the generally gloomy outlook for the world’s second-largest economy.
Alibaba, China’s most valuable company with a market capitalization of $460 billion, said sales in the three months to September 30 gained $16.7 billion. Net income, boosted by a one-time gain related to equity interest in a sister company, increased by $10 billion.
The company, which claims a two-thirds share of China’s e-commerce market, credited strong growth in its Taobao and T-mall retail platforms, as well as its nascent cloud computing business.
BABA’s shares, which have risen nearly 30% in value since the beginning of this year, gained more than 2% on Friday.
The company’s solid financial results suggest Chinese consumer spending, at least online, remains robust, even as exports decline and overall growth continues to slow. They bolster confidence in the e-commerce giant ahead of its annual Single’s Day shopping extravaganza, to be held on November 11.
Alibaba expects that this year Singles Day will attract a record 500 million shoppers. Chairman and chief executive Daniel Zhang, who earlier this assumed reins of the group from founder Jack Ma, vows that by 2024, the company will serve a billion consumers and help its merchants achieve 10 trillion yuan in gross merchandise value.
This year marks Alibaba’s 20th anniversary. To celebrate, the company is pulling out all the stops with a glitzy stadium party headlined by Taylor Swift.
Even so, shoppers on Alibaba’s platforms have vowed to shun American brands during this year’s Single’s Day, reflecting nationwide indignation over Donald Trump’s trade tariffs.
Trump, for his part, signaled hope that Chinese leader Xi Jinping might travel to Iowa to sign a “phase one” trade accord in which China would purchase billions of dollars of American agricultural products. But Chinese media this week has suggested that, while the two sides may strike some sort of interim truce, Beijing has mostly abandoned the idea of concluding an overall trade bargain with the U.S. as long as Trump remains in office.
Global investors, meanwhile, continue to hope that both governments will heed Taylor’s sage advice: you need to calm down.
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