Alibaba says its cloud computing business holds tremendous potential as China picks up pace on digitalisation drive

Alibaba Cloud posted its first profit before interest, tax and amortisation during the three months ended December

Alibaba operated the world’s fourth-biggest cloud computing service in the quarter ended September, behind Amazon Web Services (AWS), Microsoft’s Azure and Google Cloud, according to a ranking by Canalys

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Alibaba Cloud, China's largest cloud computing infrastructure services provider, is the digital technology and intelligence backbone unit of Alibaba Group Holding. Photo: Handout

Published: 8:30am, 3 Feb 2021Updated: 10:34am, 3 Feb 2021

Alibaba Group Holding, which beat third-quarter estimates with the first profit in cloud computing, said the business holds tremendous potential to augment its core e-commerce operations.

Alibaba Cloud posted it first profit before interest, tax and amortisation during the three months ended December, meeting the goal by the Hangzhou-based e-commerce behemoth for the financial year ending in March, and fulfilling the promise made by chief financial officer Maggie Wu last September.

“Over the years, our businesses have become more diversified, and more integrated as we provide more value-added service to merchants and businesses,” Wu said during a conference call with analysts on Tuesday night after the company reported its third-quarter results. “The value we add is reflected not only in our original Taobao and Tmall businesses but also in new retail, Cainiao, international commerce, local consumer service, and cloud computing.”

Alibaba operated the world’s fourth-biggest cloud computing service in the quarter ended September, behind Amazon Web Services (AWS), Microsoft’s Azure and Google Cloud, according to a ranking by Canalys.

Daniel Zhang Yong, the chairman and chief executive of Alibaba Group Holding, during the signing ceremony for establishing a joint venture to develop the electronic World Trade Platform of Yiwu, a city in eastern Zhejiang province on 18 June, 2020. Photo: Handout

Cloud computing was a major growth driver for the company, which owns South China Morning Post.

Revenue from the cloud operation grew 50 per cent during the quarter ended December to 16.1 billion yuan (US$2.470 billion), contributing 7 per cent of the group’s quarterly revenue.