Alibaba, the Chinese conglomerate, has reported a 9% increase in revenue during the second quarter of its fiscal year, indicating continued growth from the first quarter’s 12% rise. The group generated $30.8 billion in revenue during this period, with operating income surging by 34% to $4.6 million and EBITDA increasing by 18% to $5.8 million.
While Alibaba’s Chinese online commerce saw a moderate 4% growth, earning $13.3 billion through its Taobao and Tmall portals, this reflects a slow recovery in Chinese consumption amidst the ongoing real estate market crisis. To further boost sales during the upcoming Singles’ Day shopping holiday on November 11, Alibaba took an aggressive stance with its sellers, threatening to delist those who did not offer the best discounts.
On the international front, Alibaba’s digital commerce division experienced a significant 53% year-on-year increase, reaching $3.3 billion in revenue. The company is particularly optimistic about growth in the American and European markets.
Interestingly, Alibaba recently reversed its decision to transform its cloud-driven services division into a separate entity. The company had previously announced plans to divide its structure into six segments, but uncertainties surrounding US restrictions on AI-specific chips led to the abandonment of this transformation. In March, the company valued its cloud business between $41 billion to $60 billion.
Alibaba’s CEO, Daniel Zhang, surprised many by announcing his departure in September, just weeks after making cloud services the core of the group’s strategy. Zhang was replaced by Eddie Wu, a co-founder of the group, who now oversees all of its activities. Zhang’s departure came after a meager 2% growth in the last fiscal year, with revenues totaling $30.3 billion. Though operating income declined by 9% to $2.2 billion, adjusted EBITDA rose by 60% to $3.6 billion.
For more information on Alibaba’s second fiscal quarter, you can visit their official website here. Additionally, for a detailed analysis on Alibaba’s cloud business and its decision to reverse plans of separation, you can read more here.
