Just days shy of its IPO, Chinese ecommerce giant Alibaba Group reported Q2 revenue of $2.54 billion, a 46.4% increase over last year, while net income skyrocketed to $1.99 billion. The company could raise close to an additional $20 billion out of the IPO based on an average valuation of $168 billion.
In a revised F-1 the company filed Wednesday with the Securities and Exchange Commission, Alibaba also noted positive growth in average mobile monthly active users, which increased from 163 million in March to 188 million at the end of June. Active buyers totaled 279 million, more than double the number last year.
Alibaba makes its money primarily through its Taobao Marketplace and TMall properties, which nearly doubled in gross merchandising volume last quarter to $296 billion with close to a third of that volume coming from mobile.
For the most part, Alibaba’s merchant-driven and the company charges on a fee and commissions basis for online marketing services via the Alimama platform. Alibaba also runs an ad network and exchange business, which is the culmination of a merger between its affiliate network and Taobao Ad Network and Exchange. Cloud computing services, much like Amazon Web Services, is another revenue driver for Alibaba, with that figure now north of $100 million.
Alibaba recently revised its agreement with parent company Sun and Micro Financial Services for payments platform Alipay (it’s comparable to eBay’s PayPal in processing owned and operated transactions, but has significant off-network reach). Under the terms of the deal, Alibaba would stand to “gain a bigger share of earnings from financial-services affiliate Alipay,” should Sun and Micro ever go public itself.
Alibaba began as a B2B marketplace in 1999, but the launch of shopping site Taobao in 2003 and subsequent search (eTao.com) and ecommerce (Tmall.com) initiatives expanded that reach cross-channel. Alibaba, as Alan Yan of AdChina predicted, “is probably the second largest advertising company in China not just in online and digital, but across all media sectors, including TV.”
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