China-based e-commerce giant Alibaba posted robust Q2 2016 results as the company’s revenue and gross merchandise volume (GMV) continued to take off. Alibaba managed to show this strong growth despite issues surrounding the presence of counterfeit goods on its marketplaces.
Alibaba’s Q2 results demonstrate the company’s massive presence in the e-commerce industry:
- Total revenue during Q2 2016 grew 59% year-over-year (YoY) to reach nearly $5 billion.
- GMV for Q2 totaled $126 billion, marking 24% YoY growth.
- Active users across Alibaba’s marketplaces reached 434 million, growing 18% YoY.
- Mobile GMV accounted for 75% of Alibaba’s total.
Alibaba’s favorable performance during Q2 was boosted by a strong base of mobile users. The company’s mobile active users reached 427 million, marking 39% YoY growth. This growth rate has been decelerating since 2014, but Alibaba’s mobile shoppers are fiercely loyal — shoppers on the Alibaba-owned Taobao marketplace open its app, on average, seven times a day, according to CFO Wei Wu.
Furthermore, mobile overtook desktop for the first time in Alibaba’s history in terms of GMV. So even though Alibaba is likely reaching saturation among Chinese consumers, it is a breeding loyalty among its mobile users that should continue to translate into healthy momentum.
The earnings report highlights the loyalty of its customers, even as the company is faced with controversy over counterfeit goods. Alibaba’s e-commerce marketplaces like Taobao and Tmall have long been flooded with counterfeit items, and outside parties have voiced concerns about how the company handles it. In order to ease consumer concerns and ramifications from the government, Alibaba rolled out a new counterfeit-detection tool last month, dubbed the Intellectual Property (IP) Joint-Force System.
This new tool will help build up brand confidence in selling on Alibaba’s platform, which it can leverage to onboard new brands to sell on its marketplaces. It is vital for Alibaba to maintain the trust of its retail partners or it stands to risk losing inventory, and subsequently active customers, which would reverse the steady progress it has made.
Source: Business Insider