Alibaba looks for more takeover targets

PUBLISHED : Friday, 12 August, 2011, 12:00am
UPDATED : Friday, 12 August, 2011, 12:00am, the world's largest business-to-business e-commerce company, is looking at new corporate acquisitions after posting solid gains in the second quarter.

The Hangzhou-based company saw its net profit in the quarter to June rise 28 per cent to 464.55 million yuan (HK$566.6 million) from 362.96 million yuan a year earlier as it added more than 102,000 paying members amid strong overseas trades.

That beat the average forecast of 420.4 million yuan of five analysts surveyed by Thomson Reuters.

Alibaba had 68.9 million registered users worldwide as of June.

Revenue climbed 18.8 per cent to 1.62 billion yuan from 1.37 billion yuan in the previous year.

Alibaba, which takes cash up front from members through annual fees, also posted a 9.1 per cent increase in deferred revenue and customer advances to 4.06 billion yuan from 3.72 billion yuan.

It operates in more than 240 markets, connecting small and medium-sized firms that have little or no marketing budgets with buyers on vast trading websites.

Chief executive Jonathan Lu Zhaoxi yesterday said the company was 'exploring acquisition opportunities' but had no specific targets on the mainland or overseas to announce.

Alibaba stepped up its expansion in the United States last month when it acquired for an undisclosed amount online search specialist SingleFeed, its third corporate takeover in the country. Last year, Alibaba bought online software tools developer Auctiva and e-commerce software provider Vendio Services as part of a US$100 million investment plan.

In a filing with the Hong Kong stock exchange, the company said it planned to further develop and invest in its small transaction-based services, AliExpress and Wu Ming Liang Pin.

'Since we stepped up our trust and safety efforts at the beginning of the year, the number of buyer complaints has significantly declined by 70 per cent compared with the level in February,' Lu said.

The company had earlier promised to intensify its fight against fraud and rebuild customer trust after it was shaken by an internal probe, announced in February, which found more than 2,300 online sellers defrauding global buyers.

Shares of Alibaba closed 2.69 per cent higher at HK$8.79 yesterday.