Ma has used his political acumen before to help Alibaba Group Holding Ltd. become one of the world’s largest Internet companies. (Photo : www.vosizneias.com)
Alibaba Group Holding Ltd., one of China's e-commerce giants, beat analyst projections and achieved a 32 percent increase in year-on-year revenue growth, despite gross merchandise volume (GMV), the total value of goods traded across platforms, sinking to its slowest annual growth rate in the past three years.
Alibaba's shares listed in the United States closed 4 percent higher on Tuesday, rising by as much as 8.4 percent during market hours, according to a report by CNBC.
"This was a great quarter for Alibaba Group, with strong growth across the board and particular outperformance in mobile. We continued our efforts to drive healthy GMV growth, deliver an unparalleled consumer experience and help quality merchants do business on our platform," said Daniel Zhang, CEO of Alibaba Group, on the September Quarter 2015 Earnings posted on their website.
Alibaba is currently trying to make up for decelerating volume growth, resulting from fewer people engaging in online shopping and with new kinds of online buying.
The company recently became the sole owner of Youku Tudou online video streaming service, offering consumers high-quality online streaming for a price.
However, the majority of Alibaba's revenue still comes from online shoppers, an area with a heavy focus on GMV.
Tmall, Alibaba's online platform that allows businesses to sell to consumers, accounted for most of the company's volume growth, with GMV rising 56 percent.
Taobao, a service similar to eBay, showed signs of slowing down, with only 15 percent GMV growth. The service is Alibaba's biggest contributor in terms of GMV.
Overall revenue for the company increased $3.49 billion during the quarter, beating the $3.44 billion projection by analysts.
According to Ivan Feinseth, chief investment officer at Tigress Financial Partners, there should not be too much concern over low GMV, as long as overall growth is high.
"I think, revenue's up, volume's down, that means pricing is strong. That would not be evident of a slowing economy or slowing growth at all, in my view," Feinseth said in a statement to CNBC.
The quarterly financial report is good news for China. According to a report by Reuters, Beijing is counting on private consumption to help rebalance the economy, as the country's exports fall.
