Alibaba have half a billion customers around the world and close to 10 million small business transacting on their platforms every day, but what really stunned investors was the revelation that they’re expecting close to 50% growth in the current fiscal year.
They expectation of 45% to 49% growth topped analysts forecasts and puts Amazon growth to shame. Last year Alibaba grew 56%, but that included the acquisition such as the South East Asian marketplace Lazada and video-streaming site Youku. Without these additions growth would have been around 44 to 45%.
Following the news, Alibaba shares jumped almost $25 having risen from $75.45 a year ago to their now level of around $140.
An interesting tidbit from Alibaba’s Investor Day is that consumers increasingly want high-quality goods and often from international brands.
“In short, they’re willing to pay more money for better products and services. For example, the purchase of high-end personal care products in May was nine times higher than that of the category average year-on-year. In beauty care, it was 2.59 times, and the number was 1.8 times for infant formula. So in all these categories, we are seeing a lot of speed and that attracts the best players in the world.”
– Jet Jing, vice president of Tmall
Coupled with the consumer demand for what Alibaba refer to as “quality consumption”, the company expect free-cash flow of $10 billion which they intend to invest to gain B2C market share.
What all this adds up to is that if you’re not already selling on Alibaba it’s a site that you should at least consider.
