Alibaba and Continue Double Digit Sales Growth

Alibaba JD.comRumors of China’s poor economy may be greatly exaggerated, based on double-digit sales growth reported this month by marketplace leaders Alibaba and

“Our excellent results this quarter reflect the unique strength of our core e-commerce business despite challenging economic conditions,” said Maggie Wu, Chief Financial Officer of Alibaba Group, when the company released its full 2016 earnings last week. “As a result, we achieved accelerating year-over-year revenue growth of 39%, which was the highest revenue growth rate for the past four quarters.”

Annual active buyers on Alibaba’s China retail marketplaces increased to 423 million, an increase of 16 million over the prior quarter, while mobile monthly active users in March reached 410 million, an increase of 17 million over December 2015. Gross merchandise volume transacted on Alibaba’s China retail marketplaces was RMB742 billion (US$115 billion), an increase of RMB142 billion (US$22 billion), or 24% year-over-year, with mobile GMV accounting for 73% of total GMV.

For the quarter ending March 31, Alibaba said more than 100 international brands joined Costco, Macy’s, Matshumoto Kiyoshi and other international brands and retailers on the Tmall Global platform. For the quarter, Tmall Global GMV grew over 180% year-over-year.

Wu did note that Alibaba’s growth was not just about selling goods to Chinese consumers vis marketplaces such as Tmall and Taobao. Alibaba’s cloud computing and Internet infrastructure business continued its rapid expansion, with revenue increasing 175% year-over-year to RMB1,066 million (US$165 million), representing an acceleration of the 126% year-over-year growth rate achieved in the prior quarter. That made up a little less than one-fifth of Alibaba’s 2016 revenues.

Meanwhile, reported that its net revenues for the first quarter of 2016 were RMB54.0 billion (US$8.4 billion), an increase of 47.3% from the first quarter of 2015. Revenues from services and others, mainly from the Company’s ecommerce platform business, for the first quarter of 2016 were RMB4.0 billion (US$0.6 billion), an increase of 91% from the first quarter of 2015.’s annual active customer accounts increased by 73% to 169.1 million in the 12 months ended March 31 from 97.8 million in the 12 months ended March 31, 2015, excluding unique customers from

Fulfilled orders in the first quarter of 2016 were 342.1 million, an increase of 54% from 221.5 million orders fulfilled for the core business in the same period in 2015. Fulfilled orders placed through mobile accounted for approximately 72.4% of total orders fulfilled in the first quarter of 2016, an increase of more than 160% compared to the same period in 2015.

However,’s fulfillment expenses, which primarily include procurement, warehousing, delivery and customer service expenses, increased by 68% to RMB4.5 billion (US$0.7 billion) in the first quarter of 2016 from RMB2.7 billion in the first quarter of 2015. This increase was primarily due to the increase in the number of fulfillment employees associated with the expansion of the Company’s fulfillment network into lower-tier cities and rural areas, as well as the growth in consumable product offerings with lower average order size.

As of March 31, operated 209 warehouses covering an aggregate gross floor area of approximately 4.3 million square meters and a total of 5,987 delivery stations and pickup stations across China. had approximately 100,000 merchants on its online marketplace and a total of 108,985 full-time employees as of March 31. established partnerships with a number of leading international brands during the quarter to meet the fast-growing demand from Chinese consumers for high-quality, authentic imported products, and help the brands expand their presence in China. To strengthen its kitchenware offering, partnered with six top European brands in February, including WMF, WOLL, Zwilling, Fissler, Emsa and Luminarc. Germany’s TOM TAILOR GROUP launched its first Chinese online store on JD Worldwide in March, and Japan’s Kao Group also signed a strategic cooperation agreement with JD Worldwide.

“We had a solid first quarter of the year with healthy growth in revenues, new users and mobile traffic,” said Richard Liu, Chief Executive Officer of “’s commitment to authenticity and unwavering focus on the best user experience continue to win the trust of China’s growing middle class, helping us to once again outperform the industry. With our growing reputation as China’s leading online retailer and more top brands discovering the value of partnering with, we are very excited about the opportunities ahead.”

But as Alibaba and duke it out for marketplace supremacy in China, Amazon is trying to stake its claim. In April, Amazon said the Amazon Global Store on has grown to more than 10 million items, providing Chinese customers with an easier and more convenient shopping experience with authentic products curated from the website.

“This is the offer that allows Chinese customers to shop from the U.S. website,, with prices in RMB and with Chinese-language pages,” Phil Hardin, Amazon’s Director of Investor Relations, said during the company’s recent earnings call. “So it’s focused on really items that may be hard to get, and Amazon’s really trying to become the trusted source for many of these goods. So really that’s a big part of the focus.”

Tim Parry is Multichannel Merchant’s Managing Editor, and the lead programmer for Growing Global.

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