Alibaba sees better-than-expected sales in 2017

Alibaba Group, known to many as the Amazon of China, is expecting business to grow this year as it said it will boost its investments in digital media and cloud-based business and raised its full-year revenue outlook.

Alibaba shares were also up more than 3 percent Tuesday, at $101.30, after the company said it expects sales for its 2017 fiscal year to rise 53 percent over the $15.7 billion in sales it had a year ago. Alibaba had earlier forecast its year-over-year sales to climb by 48 percent. (Alibaba’s fiscal year concludes at the end of March).

The company, led by Chief Executive Jack Ma, also reported fiscal third-quarter earnings of $2.47 billion, or $1 a share, on $7.7 billion in revenue for the period ending Dec. 31. During the same period a year ago, Alibaba earned $1.92 billion, or 99 cents a share, on sales of $5.33 billion.

Alibaba has seen its sales and earnings grow in large part to its strength in the Chinese e-commerce market, where it runs the Tmall and Taobao sites, considered to be the most popular online shopping spots in China. However, the company has made digital media and entertainment one of its top areas for future growth. During its third quarter, Alibaba said that division’s revenue tripled from a year ago, to $585 million, and the company intends on spending $7.3 billion over the next three years to acquire content and grow its digital media user base.

Cloud computing is another area where Alibaba is putting its attention as it tries to diversify from its e-commerce roots. Alibaba reported cloud-computing revenue of $254 million during its third quarter, a figure that also tripled from the third quarter a year ago. Alibaba’s cloud-computing services are used mostly in China, where the company competes with similar offerings from Amazon and Microsoft.

Last week, Alibaba announced a cloud services deal with the International Olympic Committee to be the IOC’s “official ‘cloud services’ and ‘e-commerce platform services’ partner,’ according to a company statement.

Alibaba has also recently launched new partnerships with the IOC and brands such as Louis Vuitton to fight the listing and sale of counterfeit products on the company’s e-commerce platforms.

Photo: The Alibaba Group corporate logo. (Courtesy Alibaba)

 

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