At a time when concerns are growing about the slow pace of China's economy, Alibaba, the country's e-commerce giant, recorded a robust growth in quarterly earnings with an increase of 32 percent.
Alibaba Group Holding Ltd. registered a growth in revenue than what was expected in the latest quarter. Besides, this dominant player in Chinese e-commerce sector reached a deal of approximate $900 million for selling its stock in Meituan - Dianping.
Daniel Zhang, CEO of the company, attributes this growth to the expanding middle class of China. According to him, the new generation middle class people are less worried about saving, as their parents were, and instead, they are becoming more shopping crazy and always finds new interest in online shopping.
Another fact that helped the company to increase its revenue is the rural development. More numbers of farmers started using the platform, and other facilities provided by Alibaba, to sell their products to the urbanites. International trade, including the selling of international brands to Chinese is also one important reason of Alibaba's revenue growth.
Although, Alibaba recorded high revenue, the company faces many challenges too. It is said that even Alibaba is the major player in Chinese e-commerce sector, with almost 80 percent market share, it has to find ways to maintain and to increase their revenue further. There are many small time players who are growing in greater momentum and are expected to pose challenges in the near future.
Meanwhile, the company is confident to meet these challenges that they are facing, as the revenue generated in the last quarter of the year was almost double of what it could generate in the previous quarter.
Alibaba's Executive Chairman Joe Tsai expressed confidence that the company can benefit from the change of Chinese Economy that is driven by consumption and services.