While plenty of concern in regards to the Chinese economy decline, Alibaba, the biggest e-commerce in China is displaying stability.
2 Nov 2016 – New York Times
Alibaba Group said on Wednesday that its revenue grew strongly in the three months through the end of September, as the myriad brands and small-time vendors on its online shopping sites kept spending heavily on advertising. Although Chinese economic growth has slowed, more shoppers are turning to Alibaba sites while abandoning physical retail outlets like malls.
Alibaba said its sales rose 55 percent to $5.14 billion in its second quarter from the same period a year earlier. Net profit dropped 69 percent from a year ago, to $1.06 billion, because of a one-time accounting gain that had raised last year’s bottom line.
While the company has been mostly immune to China’s slowing growth — gross domestic product expanded 6.7 percent in the past three quarters, down from 6.9 percent for all of 2015 — the value of goods sold on Alibaba’s online platforms had begun to plateau. That’s in part because it has a strong hold on the online market for China’s middle-class shoppers, almost all of whom now own a smartphone.
To compensate for slowing sales growth on its platforms, Alibaba — which makes money on advertising and fees paid by the vendors that set up virtual stores on its platforms — has been doing more to improve targeting of advertisements. It is also seeking to bring in new international brands that pay a fee to sell on its platforms.