Annual active consumers on Alibaba’s China retail marketplaces reached 711 million, an increase of 18 million from the 12-month period ended in Q3 2019. Mobile MAUs on its China retail marketplaces reached 824 million in December 2019, an increase of 39 million over September 2019.
Alibaba Group Finance Highlights for Q4 2019
Alibaba’s revenue was RMB161,456 million (US$23,192 million) in Q4 2019, an increase of 38% year-over-year. But, CEO warns that coronavirus “will present near-term challenges to the development of Alibaba’s business across the board.” Shares of Alibaba fell 2% in early trading following Zhang’s remarks.
Annual active consumers on its China retail marketplaces reached 711 million, an increase of 18 million from the 12-month period ended September 30, 2019. Mobile MAUs reached 824 million in December 2019, an increase of 39 million over September 2019.
Income from operations was RMB39,560 million (US$5,682 million), an increase of 48% year-over-year. Adjusted EBITDA, a non-GAAP measurement, increased 37% year-over-year to RMB55,880 million (US$8,027 million).
Adjusted EBITA for core commerce was RMB58,075 million (US$8,342 million), an increase of 26% year-over-year. Alibaba’s marketplace-based core commerce adjusted EBITA, a non-GAAP measurement, increased 22% year-over-year to RMB66,371 million (US$9,534 million).
Net income attributable to ordinary shareholders was RMB52,309 million (US$7,514 million), and net income was RMB50,132 million (US$7,201 million).
Non-GAAP net income was RMB46,493 million (US$6,678 million), an increase of 56% year-over-year.
Diluted earnings per ADS was RMB19.55 (US$2.81) and non-GAAP diluted earnings per ADS was RMB18.19 (US$2.61), an increase of 49% year-over-year. Diluted earnings per share were RMB2.44 (US$0.35) and non-GAAP diluted earnings per share was RMB2.27 (US$0.33), an increase of 49% year-over-year.
Net cash provided by operating activities was RMB96,505 million (US$13,862 million) and non-GAAP free cash flow was RMB78,279 million (US$11,244 million).
Alibaba Retail & E-Commerce in Q4 2019
In December 2019, Alibaba’s China retail marketplaces had 824 million mobile MAUs, representing a net increase of 39 million from September 2019.
Annual active consumers on Alibaba’s China retail marketplaces reached 711 million for the 12 months ended December 31, 2019, an increase of 18 million compared to 693 million for the 12 months ended September 30, 2019.
Over 60% of Alibaba’s new annual active consumers in Q4 were from less developed areas.
“Taobao Live” where merchants and key opinion leaders (“KOLs”) use live-broadcast to market to their fans and customers, has become one of the fastest-growing and effective selling channel on Alibaba’s China retail marketplaces.
In December 2019, GMV generated from Taobao Live and the number of monthly active users who watched Taobao Live both grew over 100% year-over-year.
Double 11 Global Shopping Festival adds to robust GMV growth on China’s leading consumer and engagement platform.
Tmall continues to expand its leadership position as the consumer engagement and distribution platform of choice for brands in China. Tmall online physical goods GMV, excluding unpaid orders, grew 24% year-over-year in Q4 2019, with strong growth in FMCG and consumer electronics.
Alibaba’s consumer segmentation initiatives have been well received by users as it continued to see strong order growth and higher purchase frequency.
Alibaba’s annual 11.11 Global Shopping Festival in the quarter was another record-breaking event, generating RMB268.4 billion (US$38.4 billion) in GMV settled through Alipay on Alibaba’s retail marketplaces and consumer services platforms, up 26% year-over-year.
Over 200,000 brands, including 22,000 international brands, participated in last year’s event, among which 15 brands each generated GMV of over RMB1 billion (US$143.0 million) and 299 brands each generated GMV of over RMB100 million (US$14.3 million).Consumer demand from less developed areas remained robust, accounting for 54% of the GMV during the festival. During the quarter, GMV from less developed areas grew about 40% year-over-year.Click To Tweet
In Q4 2019, Ele.me acquired 48% of its new customers from the Alipay app.
Creating the New – Alibaba’s self-operated grocery retail chain Freshippo (known as “Hema” in Chinese) continues to achieve solid same-store sales growth. Freshippo has been implementing multi-format retail strategies and introducing new initiatives to improve user experience and customer loyalty.
As of December 31, 2019, Alibaba had 197 self-operated Freshippo stores in China, primarily located in tier 1 and tier 2 cities. Alibaba will continue to invest in the growth of this business by, among other things, increasing Freshippo’s store density in existing cities in order to improve consumer coverage and delivery efficiency.In September 2019, Tmall Supermarket launched a store-to-door business with Sun Art Retail Group to make half-day delivery of food and daily necessity products to consumers living beyond the catchment area of Sun Art’s stores.Click To Tweet
The service marries Sun Art’s store-based inventories with Alibaba’s logistics infrastructure powered by Cainiao Network to better serve consumers that live within a 3-to-20 kilometer delivery radius of Sun Art’s stores.
Cainiao Network continues to focus on improving domestic and international one-stop shop logistics services and supply chain management solutions to serve the Alibaba Digital Economy’s consumers and merchants.
During the quarter, Cainiao Network’s revenue grew 67% year-over-year to RMB7,518 million (US$1,080 million). This revenue growth was primarily driven by increased merchant adoption of “Fulfilled by Cainiao” services from Alibaba’s fast-growing cross-border businesses.
Cainiao Network and its logistics partners delivered a record 1.29 billion packages generated from this year’s 11.11 Global Shopping Festival. During this year’s festival, Cainiao Post enabled greater delivery efficiency with 362 million packages picked up at its stations around the country, up 88% year-over-year.
In November 2019, Alibaba made an additional investment of RMB23.3 billion (US$3.3 billion) to increase Alibaba’s equity stake in Cainiao Network from approximately 51% to approximately 63%, by subscribing for newly issued Cainiao Network ordinary shares in its latest financing round and purchasing ordinary shares from a third party.
International – strong growth in Alibaba’s global markets.
Lazada, Alibaba’s Southeast Asian e-commerce platform, recorded 97% year-over-year quarterly order growth reflecting strong consumer demand in the apparel and accessories and general merchandise categories.
AliExpress saw robust merchant and consumer participation in the 11.11 Global Shopping Festival, which generated strong GMV growth of 46% year-over-year.
In October 2019, Alibaba completed the contribution of Alibaba’s AliExpress Russia businesses to a joint venture with Mail.ru Group, MegaFon and Russian Direct Investment Fund (“RDIF”). Alibaba holds less than a majority of the voting rights to comply with local regulations, and as a result, it deconsolidated the AliExpress Russia businesses upon the completion of this transaction in this quarter.
Cloud Computing & Digital Media
Alibaba’s cloud computing business for the first time generated over RMB10 billion of revenue in a single quarter. Alibaba Cloud owns 43% of China’s public cloud market in 2018.
Cloud computing revenue grew 62% year-over-year to RMB10,721 million (US$1,540 million), driven by increased revenue contributions from both Alibaba’s public cloud and hybrid cloud businesses.
For the quarter, Youku’s average daily subscribers increased 59% year-over-year.
The increase was primarily driven by Youku’s more effective targeting of new subscribers during key promotional campaigns, an increase of auto-renewal subscribers and a greater contribution from the 88VIP membership program on Alibaba’s China retail marketplaces.
Alibaba continues to invest in original content production capabilities while seeking cost efficiencies and return on investment, resulting in narrowing adjusted EBITA losses year-over-year during the quarter.
Initial Public Offering in Hong Kong
On November 26, 2019, Alibaba successfully listed Alibaba’s ordinary shares on the main board of The Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”) with a global offering of 575,000,000 ordinary shares, comprised of an international offering and a Hong Kong public offering.
The Hong Kong-listed shares are fully fungible with Alibaba’s American depositary shares (“ADSs”) listed on the New York Stock Exchange (“NYSE”) (one ADS representing eight ordinary shares). Alibaba’s gross proceeds from the global offering, before deducting underwriting fees and the offering expenses were approximately HK$101.2 billion (US$13.0 billion).
Alibabaplan to use these proceeds for the further implementation of Alibaba’s strategies to drive user growth and engagement, empower businesses to facilitate digital transformation and improve operational efficiency, and continue to innovate.