If you were unsure whether China’s consumers are still shopping, look no further than Alibaba’s latest financials. Whilst the growth rates were around half of the giddying heights of 2014, they are from a much larger base and still make our eyes water.
73 million more shoppers used Alibaba’s platforms last year, bringing the total to 407 million – 22% up on 2014. Together they spent just shy of a trillion RMB – ¥964 billion (US$149 billion), 23% more than a year earlier. Shoppers grew 45% and sales 49% in 2014. Tmall Global cross border sales grew 179% year on year, yet still only account for a small share of overall revenue.
Mobile continued to increase its dominance, with the equivalent of 96.5% of all shoppers using a smartphone to access the platform at least once a month. Spending on mobiles grew 48% from a year ago and accounted for 65% of all sales.
Alibaba is continuing to make shopping on its platform more convenient and attractive for consumers by incentivising good service, introducing even more promotional events and building smarter marketing capabilities through big data.
It is investing in logistics through its affiliate Cainiao and partners, ensuring same-day delivery in Beijing, Shanghai, Chengdu, Guangzhou, Hangzhou, Suzhou and Wuhan, and next day delivery in 88 cities – more than double the 41 cities just 6-months earlier. It is also focusing on expanding into China’s untapped rural areas. Through its diverse range of acquisitions, it has plenty of opportunities to cross promote offline and online products and services.
2015 income from Alibaba’s Chinese consumer retail business accounted for 83% of revenue, slightly up from 82% in 2014, indicating that Alibaba’s global expansion plans were less effective than its domestic growth initiatives last year. An additional cash flow of $3.7 billion in the December quarter will ensure they have plenty of money to expand in both areas.
Alibaba Group’s infographic is included below…