Alibaba surging sales shake off slowing Chinese economy

Alibaba Group Holding Ltd. defied the slowdown in China’s economy with sales that climbed by almost a third as the online emporium captured more of the nation’s shift to mobile shopping. Shares surged.
Sales jumped 32 percent to 22.2 billion yuan (USD3.5 billion) in the three months ended September, the company said yesterday, beating analyst estimates. Shares rose as much as 12 percent in pre-market trading as the stock heads for its best month since last year’s initial public offering.
Alibaba has forged partnerships with retailers including electronics chain Suning Commerce Group Co. and offered new cloud-based services for merchants to stoke transaction growth and limit the impact of an economy heading for its slowest growth in 25 years. Increased promotions on Alibaba’s Tmall.com and Taobao Marketplace are driving sales ahead of next month’s Singles’ Day, the country’s biggest shopping event.
“The results were surprising because people were expecting weak performance due to an overall slowdown in China’s economy,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “It was a beat because people’s expectations were pretty low.”
Net income surged to 22.7 billion yuan after recognizing an 18.6 billion-yuan gain on its stake in Alibaba Health Information Technology Ltd.
Even as China’s economic growth drops to a level not seen since the late 1970s, billionaire Chairman Jack Ma is pushing ahead with acquisitions. The company has participated in almost $15 billion of deals announced this year, about triple the number for all of 2014, according to data compiled by Bloomberg.
The company this month offered $4.6 billion for the rest of Youku Tudou Inc. to stream more video content to Chinese Internet users through control of the YouTube-like site. Buying Youku is part of Alibaba’s plans to reach more of the 594 million Chinese who access the Internet from mobile devices and are hungry for online content. Lulu Yilun Chen, Bloomberg