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Alibaba reports Strong sales and better than expected revenues of $9.73 billion, which surged 61 percent for the 1st quarter of 2018.
Since its public listing in 2014 in New York, they have reported income growth for each quarter over the past two years of over 50 percent.
Alibaba Group Holdings Ltd. is one of China’s most valuable companies. Their efforts to revamp brick and mortar retailing with technology, skills in ordering and providing e-commerce platform throughout Southeast Asia has paid off beating rivals.
Threats from its major competitor JD.com, who have partnered with Tencent Holdings has meant that Alibaba’s operating margin has fallen from 25 percent to 15 percent as they keep spending to fend off its competitor, weighing on their margins.
Tencent Holdings Ltd is a giant in social media and gaming, with offline retail, marketing and payments.
In a bid to ward off the threat of intense competition, Alibaba intends to invest another $2 billion in Lazada Group, a Southeast Asian e-commerce firm. They are also planning to issue shares to investors, adding to the recent investments in microchips, logistics and brick and mortar stores.
Alibaba also recently bought a 30 percent stake in Ant Financial, a payment business.
Alibaba’s Vice Chairman, Joseph Tsai said that they are going to be extremely competitive.
The Heat Is on As Competitors Each Compete for a Slice of Cake From the $4 Trillion Retail Sector
Amazon.com over the recent months has also been investing in supermarkets and retailers, with the recent acquisition of Whole Foods Market Inc. owned by Tencent Holdings Ltd, Alibaba’s no. 1 rival.
Alibaba’s CEO, Daniel Zhang said that their goal is that by 2020 they will surpass $1 trillion in gross merchandise volume whilst continuing to invest aggressively.
In New York, Alibaba’s U.S. traded shares gained 1.7 percent to $185.55.
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