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E-commerce Remains Alibaba’s Cash Cow
Article

E-commerce Remains Alibaba’s Cash Cow

Zhang Xinyu
36Kr, 2019
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Editorial Rating

8

Qualities

  • Comprehensive
  • Analytical
  • Concrete Examples

Recommendation

Alibaba did it again: Its revenue registers a year-on-year growth of 41% on its Q3 2018 fiscal report, even when China’s economy is slowing down. However, data from individual sections indicate a few weak spots. Zhang Xinyu, a senior writer for 36Kr, a media platform that provides business information, points out that Alibaba’s e-commerce division is robust, but other sections are struggling. He examines the cause of the contrast in a clinical manner, fleshing out his views with numbers and details. His analysis is thorough, but his predictions lack specificity. Many readers with a little prior knowledge will, for example, miss information on how Alibaba plans to commercialize its newsfeed function.

Summary

According to Alibaba’s Q3 quarterly financial report for the fiscal year 2018, released in January, the company’s revenue totaled ¥117.278 billion ($17.5 billion), a year-on-year increase of 41%. Its net income attributable to ordinary shareholders grew by 37%, reaching ¥33.052 billion.

The company statistics demonstrate impressive operational efficiency. Measured by the ratio of earnings before interest, tax, depreciation and amortization (EBITDA) to total revenue, operating profitability of Alibaba’s e-commerce division went up 45% – exceeding market expectations and the previous quarter’s data by 4%. This striking increase doesn’t come from financial consolidation or business segmentation but purely from operations. The outstanding performance of Alibaba...

About the Author

Zhang Xinyu is a senior writer for media platform 36Kr, which provides information on business and technology, while also featuring financial services.

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