Alibaba’s Cloud Computing Revenues Jump, Bad News For Microsoft, AWS And Google?

China’s retail and commerce giant Alibaba Group has announced its financial performance results for the quarter ending June 30, 2019 with a user base of 674 Mn annual active consumers. The conglomerate has posted $16.7 Bn in revenue, a 42% Y-o-Y growth with a net income of $2.7 Bn.

Daniel Zhang, Chief Executive Officer of Alibaba Group, said, “We will continue to expand our customer base, increase operating efficiency and deliver robust growth. With strong cash flow from our core commerce business, we will continue to invest in technology and bring digital transformation to millions of businesses globally.”

Here are few interesting financial details:

• Cloud computing revenue grew 65.7% year-over-year to $1.1 Bn during the quarter, primarily driven by an increase in average revenue per customer
• Mobile MAUs on China retail marketplaces reached 755 Mn in June 2019, an increase of 34 Mn over March 2019
• Adjusted EBITA for core commerce was $5,976 Mn, an increase of 25% year-over-year
• For TaoBao, during the quarter, over 70% of the increase in annual active consumers was from less developed areas
• Tmall continues to gain wallet share and grow faster than the sector average
• Digital media and entertainment segment revenue for the June quarter grew 6% year-over-year as the industry undergoes rationalization and tighter regulatory scrutiny on content

Alibaba In India: Cloud And More

Alibaba Group has so far invested more than $2 Bn in Indian companies like One97 Communications which operates Paytm, online grocery delivery startup BigBasket, ecommerce company Snapdeal, and online food aggregator Zomato.

The company has however shied away from entering India directly, with only a small B2B subsidiary— Alibaba India Ecommerce— headquartered in Mumbai. It also has AliExpress, which delivers products to India, albeit taking longer time than Indian ecommerce platforms.

The company has heavily focused on creating cloud computing capacities in the country. n India, Alibaba Cloud provides products and services to clients in India across the ecommerce, gaming, media, retail and IoT sectors through an extensive network of distributors.

The company opened its first India data centre in Mumbai in January 2018 to address the increasing demand for Cloud computing services among the fast-increasing number of Indian small and medium-sized businesses in the region.

It has repeatedly emphasised on the significance of the Indian market. Earlier, Henry Zhang, chief product officer of Alibaba Cloud said, “Indian customers are very much on the cutting edge. Some of the largest growing startups such as Paytm and Big Basket are in India. We are focussed on building products and services that will benefit Indian customers.”

Alibaba Cloud intelligence international president, Selina Yuan supported Zhang’s claim and said the company recognises India as an important market and that’s why it already has data centres in the country. Alibaba Cloud has a dedicated team based in Mumbai and big local customers such as Paytm.

Talking about the Indian ecommerce market, Joseph C Tsai, cofounder and executive vice chairman of the Alibaba Group had earlier said, “India for us is a market where we want to be very very patient. We are patient because we think there is time for the Indian market to develop.”