The core commerce business and growing cloud unit helped drive revenues for the world’s biggest online retailer, Alibaba Group Holding Ltd, after topping first-quarter revenue estimates on Thursday.
The Chinese e-commerce giant shares were up about 3 percent in pre-market trade but have been under burden in recent months amid a broader sell-off in Chinese stocks over concerns about the impact of the U.S.-China trade war, CNBC reported.
Shares hit a record high close of $210.86 on June 14, but have declined about 15.6 percent since. That equates to an $81.3 billion fall in market capitalization or value. The stock is still up just over 3 percent year-to-date.
Alibaba’s core commerce business, which focuses on its online shopping sites Tmall and Taobao, is still the company’s biggest unit, accounting for around 86 percent of revenues. Core commerce revenues came in at 69.19 billion yuan, just below analyst expectations of 70.49 billion yuan. This represented a 61 percent year-on-year rise.
The company has opened new data centers around the world and launched new products in key markets like Europe to try to boost market share and revenues.
“The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validate our strategy of investing in customer experience, product, technology, and infrastructure for the future,” Maggie Wu, the chief financial officer at Alibaba, said in a statement Thursday.
Net income attributable to shareholders, however, fell 41 percent to 8.7 billion yuan, or 3.3 yuan per share, due to one-off costs related to share-based compensation for Ant Financials’ recent fundraising.
While revenue growth has accelerated since Alibaba’s 2014 stock exchange listing, aggressive investment in offline retail, logistics and cloud computing has squeezed profit margins.