Nov 21, 2023
At a time when the Chinese conglomerate has abandoned plans to spin off its Cloud business, Alibaba announced a 9% increase in its revenue for the second quarter of its fiscal year, spanning from July to September. This growth follows a 12% rise recorded in the first quarter.
The group generated $30.8 billion in the second quarter. Operating income also surged by 34%, reaching $4.6 million, while EBITDA increased by 18% to $5.8 million.
Alibaba saw a moderate 4% growth in its Chinese online commerce, generating $13.3 billion through its Taobao and Tmall portals. These figures are reflective of a slow resurgence in Chinese consumption amid the local real estate market crisis.
This scenario reportedly led the e-commerce giant to adopt an aggressive stance with its sellers during the Singles’ Day shopping holiday on November 11. Reuters reported threats of delisting for merchants not offering the best possible discounts.
On the other hand, its international digital commerce division witnessed a 53% year-on-year increase, reaching $3.3 billion. The company notably pins its hopes on American and European markets as growth avenues.
These figures emerge as Alibaba announces its decision against transforming one of its six divisions, dedicated to cloud-driven services, into a separate entity. In March, Alibaba had indicated its intention to divide its structure into six segments. The company attributes its reversal to the uncertainties surrounding US restrictions on AI-specific chips.
“The recent expansion of US restrictions on the export of cutting-edge computer chips has created uncertainties for the Cloud Intelligence Group’s prospects,” stated the company, whose cloud business was valued between $41 billion to $60 billion in March.
Taking the helm of the group only in June, Daniel Zhang surprised by announcing his departure in September, just weeks after making cloud services the core of the group’s strategy. He was succeeded by Eddie Wu, a co-founder of the group, now overseeing all its activities.
Alibaba experienced a meager 2% growth in the last fiscal year, ending in March, with revenues totaling $30.3 billion. Operating income witnessed a 9% decline to $2.2 billion, while adjusted EBITDA rose by 60% to $3.6 billion.
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