Alibaba almost doubles sales and more than doubles profit | RetailDetail

Alibaba almost doubles sales and more than doubles profit

Alibaba almost doubles sales and more than doubles profit

China’s largest e-commerce player Alibaba saw its sales rise by 80% and its profit by an impressive 150% in the last quarter of 2012. Rumours about a pending public offering are getting more persistent.

Profits almost tripled

The news that quarterly sales of Alibaba have risen by 80% to 1.84 billion dollar (almost 1.4 billion euro) and that profits have almost tripled to 642.2 million dollar (about 500 million euro), was published in a document Yahoo! handed to the American exchange watchdog SEC. The Chinese themselves do not communicate about their sales figures, but Yahoo! – that owns 24% of Alibaba – is obligated to do so as a listed company.

 

Alibaba itself does not sell goods, but it runs internet platforms such as Taobao (C2C) and Tmall.com (B2C), a marketplace that connects retailers and brands with online shoppers. The company gets paid via commission on the sales made.

 

As largest e-commerce player of China, Alibaba is in the best position to profit from the current internet boom in China: between 2003 and 2011 internet sales have doubled each year and according to McKinsey & Co sales will triple between 2011 and 2015 to 395 billion dollar (about 300 billion euro).

 

At the end of 2012 China had over 564 million internet users, 10% more than the previous year. The total value of all goods sold by Alibaba this year, should be around 250 billion euro, according to analysts.

 

Soon at the exchange?

The persistent super growth – between September 2010 and September 2011 sales of Alibaba also grew by 81% and the year after by 74% - is big news, because a public listing of Alibaba is written in the stars.

 

Billionaire Jack Ma, chairman of the Alibaba Holding, said last year that a public listing within five years is a possibility, but more and more analysts are predicting the IPO to happen this year or maybe the next year. Alibaba would be worth about 62.5 billion dollar (47.48 billion euro), as calculated by eight investment banks on behalf of Bloomberg.

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