HANGZHOU, China — Alibaba Group Holding Ltd.'s quarterly revenue beat the highest analyst estimate after personalised shopping recommendations and a June sales bonanza drove China's leading online retail business.

Revenue at Asia’s biggest company rose 42 percent to 114.9 billion yuan ($16.3 billion) in the three months ended June, surpassing the 111.6 billion yuan average estimate. Its shares climbed 2.6 percent in pre-market trading.

Alibaba, whose business is predominantly domestic, is riding a surge in internet shopping in defiance of a slowing home economy. Chinese online sales accelerated in the June quarter from the previous three months, helped by sales promotions that unfolded across the country’s largest e-commerce platforms. Alibaba is also fine-tuning services that target buyers based on personal preferences, introducing tweaks to product feeds for instance, to boost ad revenue and buying.

”Despite the macro environment not being as good as last year, Alibaba has launched a lot of new initiatives and the personalised product feed is helping maintain its growth rate,” said Steven Zhu, an analyst with Pacific Epoch. “Its live-streaming services and collaboration with international brands are helping.”

Alibaba is approaching a critical juncture just as Chief Executive Daniel Zhang prepares to replace billionaire founder Jack Ma as chairman in September. A US campaign of tariffs and other curbs is heightening uncertainty around the world's second-largest economy, while the emergence of rivals at home such as Pinduoduo Inc. tests its longstanding dominance of Chinese online retail.

The e-commerce titan may be on the look-out for assets to bolster its lead. Alibaba is in talks to pay $2 billion for NetEase Inc.’s Kaola, which specialises in selling foreign goods to Chinese consumers, local media outlet Caixin reported.

The company is also hatching plans to raise more capital. Alibaba’s quarterly performance bolsters its ambition of pulling off what could be Hong Kong’s biggest share sale since 2010. The company is said to have already filed confidentially for a stock listing, but it’s unclear when it might go ahead with the float given the widespread protests that have gripped Hong Kong over the past 11 weeks.

Adjusted earnings per share came to 12.55 yuan versus the 10.3 yuan projected.

“E-commerce growth remained strong in the second quarter,” David Dai, a Hong Kong-based analyst with Bernstein, said in a report before the earnings release. “We expect Alibaba user and transaction growth to accelerate in the second quarter.”

By Lulu Yilun Chen; editors: Peter Elstrom, Edwin Chan and Colum Murphy.