|Alibaba earnings surge
Alibaba Group, China's largest e-commerce company, posted a 64 percent rise in revenue in the January-March quarter and a six-fold rise in net profit, cementing its position as a key beneficiary of China's e-commerce explosion.
Alibaba's net profit for the first quarter jumped to US$220.5 million from US$29.6 million a year ago. Sales climbed to US$805.9 million, according to a filing by Yahoo Inc to the U.S. Securities and Exchange Commission, Reuters reports.
Based on the first-quarter results, Alibaba Group, which is 40 percent owned by Yahoo, is the second-largest Chinese internet company by revenue, behind Tencent Holdings and ahead of Baidu Inc. It is the last China internet behemoth that is still private and not required to publicly disclose financial statements.
Alibaba, which runs the Taobao Marketplace, China's largest business-to-consumer e-commerce website, and Alibaba.com, China's largest business-to-business platform, has a business model that revolves around online advertising and subscription fees.
“In China people are transitioning from traditional shopping methods to e-commerce, so it is a very very fast growing industry,'' said Alex Lee, an analyst with Hong Kong-based Haitong International Research. “There are other players like Tencent that are rising in the industry. But in the near term, Alibaba will stay the dominant force in China's e-commerce industry.’’
According to data from Analysys International, in the second quarter this year, Alibaba Group was the second-largest platform for Internet advertising by market share, after Baidu.
ources told Reuters that Taobao accounted for almost two-thirds of US$2.8 billion group revenue in 2011.