Alibaba Group Holding Ltd. is bouncing back from the impact of the coronavirus pandemic on its business.
The China-based e-tail behemoth, which today posted first-quarter financial results, reported that Chinese consumer spending has returned to levels prior to widespread lockdowns and stay-at-home orders early this year.
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“Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board,” CFO Maggie Wu said in a statement. “Our strong profit growth and cash flow enable us to continue to strengthen our core business and invest for long term growth.”
For the three-month period ended June 30, the tech and retail conglomerate logged a 34% jump in sales to $21.76 million, while adjusted profits spiked 30% to $7.22 billion. It also saw an increase of 16 million annual active consumers, pushing the total number of users on its China retail marketplaces to 742 million, as well as noted 874 million mobile monthly users, a 28 million gain from the prior quarter.
“We were well positioned to capture growth from the ongoing digital transformation, which has been accelerated by the pandemic, in both consumption and enterprise operations,” chairman and CEO Daniel Zhang said in a statement. “We mobilized our entire digital infrastructure to support the economic recovery of businesses across a wide range of sectors, while broadening and diversifying our consumer base by addressing their changing preferences in a post-COVID-19 environment.”
In February, Alibaba warned that its supply and logistics operations had been negatively impacted by the COVID-19 outbreak, which originated in the Chinese city of Wuhan in December and has since spread globally. The company’s means of production, it added, had also been hampered by office, factory and store closures.
However, the health crisis ultimately led consumers to adopt a more digital approach to purchasing daily necessities and non-discretionary products. For the months of February and March, as movement in China screeched to a halt, Alibaba recorded outsized growth in its grocery category, driven by a surge in the number of online shoppers, higher purchase frequency and larger order size.
Three months ago, the multinational corporation reported fiscal year 2019 sales that shot up 35% to $71.9 billion, while earnings per share advanced 38% to $7.48. At the time it said it expects fiscal 2021 revenues in China to amount to $91 billion.