Alibaba delivers 61 per cent growth in revenue amid increased New Retail investment

Alibaba Group Holding reported revenue growth of 61 per cent for the quarter ended June 30, powered by its main e-commerce business even as it steps up investment in on-demand local services and other businesses under its “New Retail” initiative.

The New York-listed company’s revenue reached 80.9 billion yuan (US$11.8 billion), up from 50.18 billion yuan in the year-earlier period, according to a statement.

Net income attributable to ordinary shareholders slid 41 per cent to 8.7 billion yuan, due to higher expense of shares awarded to employees as a result of an increase in valuation of affiliate Ant Financial Services. Excluding that impact, profit would have increased by 35 per cent.

The Hangzhou-based e-commerce giant is increasing its investment to support its New Retail strategy, a series of initiatives to integrate the online and offline shopping experiences for consumers across a number of products and services. Those investments are being made in the face of increased competition on multiple fronts in China, where its ecosystem of services rival those of Tencent Holdings.

“Our New Retail initiatives are substantially growing Alibaba’s total addressable market in e-commerce,” Joseph Tsai, the executive vice-chairman at Alibaba, said in a conference call on Thursday. “Alibaba’s three-pronged consumer offering in retail, entertainment and local services will be the long-term drivers of value creation, as the Chinese middle class expands and more of these consumers demand a higher-quality lifestyle.”