The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
HANGZHOU, China — Alibaba Group Holding Ltd. raised its outlook for full-year revenue growth after reporting sales that beat analysts' estimates, buoyed by advertisers who spent more to lure shoppers.
China’s biggest e-commerce company is now predicting a 49 to 53 percent rise in revenue in the current fiscal year, after acquiring and folding in results from its logistics arm Cainiao. It reported a 61 percent rise in sales to 55.1 billion yuan ($8.3 billion) in the three months ended September, the company said Thursday. That compares with the 52 billion-yuan average of estimates compiled by Bloomberg. Adjusted earnings-per-share were 8.57 yuan compared with the 6.90 yuan average of estimates.
The e-commerce giant has opened its wallet to woo shoppers and improve marketing services for merchants while splurging billions to look for new sectors of growth. It’s shaking up supermarkets and department stores while investing in artificial intelligence and cloud computing, areas of direct competition with Amazon.com.
“Alibaba is doing really well in advertisement monetisation, in that sense it’s more like a media company than an e-commerce company,” said Steven Zhu, a Shanghai-based analyst at consultancy Pacific Epoch. “The company’s ability to make money from its mobile app has improved significantly.”
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Shares of Alibaba closed Wednesday at $186.08 in New York. The stock has more than doubled this year, adding $250 billion to its market value.
By Lulu Yilun Chen; editors: Robert Fenner and Edwin Chan.
With consumers tightening their belts in China, the battle between global fast fashion brands and local high street giants has intensified.
Investors are bracing for a steep slowdown in luxury sales when luxury companies report their first quarter results, reflecting lacklustre Chinese demand.
The French beauty giant’s two latest deals are part of a wider M&A push by global players to capture a larger slice of the China market, targeting buzzy high-end brands that offer products with distinctive Chinese elements.
Post-Covid spend by US tourists in Europe has surged past 2019 levels. Chinese travellers, by contrast, have largely favoured domestic and regional destinations like Hong Kong, Singapore and Japan.