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E-commerce: Alibaba’s Income Is Mostly Mobile For The First Time

Alibaba just announced its financial results for the quarter ended June 30, 2015. The company missed its revenue targets by posting a less-than-expected revenue increase of 28 percent. But the real story is Alibaba’s move towards mobile: for the first time ever, the company says its mobile revenues accounted for more than 50 percent of its total commerce revenues in China.

Mobile monetization

Alibaba extended their mobile usage leadership with 307 million MAUs and 55% of GMV transacted through mobile devices during the June 2015 quarter, and they made significant progress in monetizing mobile transactions. For the first time, mobile revenues exceeded desktop revenues in the China retail marketplaces. The mobile revenue from China retail marketplaces for the current quarter was RMB7,987 million (US$1,288 million), accounting for 51% of our China retail marketplace revenue in the June 2015 quarter, which represents a year-on-year increase in mobile revenue of 225%.

E-commerce results

Specifically, at US$1.288 billion, Alibaba’s mobile revenue for the quarter accounted for 51 percent of the company’s total China commerce revenue. It increased by 225% to RMB7,987 million (US$1,288 million), or 51% of the China commerce retail revenue, in the quarter ended June 30, 2015, compared to RMB2,454 million, or 19% of the China commerce retail revenue, in the same quarter of 2014.

Alibaba says it has reached 307 million monthly active mobile users, and mobile spending (in terms of gross merchandise volume, or GMV) reached $60 billion. That’s a 125 percent year-on-year increase, and accounts for 55 percent of the total spending on Alibaba’s platforms in China. And it means that Alibaba’s mobile users are spending an average of US$195 per person per quarter, up from US$159 half a year ago.

mobile sales app_ alibaba

The year-on-year increase in mobile revenue from the China commerce retail business was due primarily to an increase in GMV generated on mobile devices and also to an increase in the mobile monetization rate.

In total, spending on Alibaba’s platforms (GMV) reached US$109 billion. The company says it now has 367 million active buyers, but those are annual active buyers – not all of them necessarily made a purchase this quarter.

Most probably did, though, because Alibaba says, on average, these active buyers place 58 orders a year across Alibaba’s platforms. That’s a rate of more than one order a week.

mobile sales app_alibaba

Other results

Even though its total revenue growth was lower than expected, Alibaba’s profits didn’t fail to disappoint this quarter, with the company posting a net profit of US$4.97 billion.

The health of Alibaba’s mobile business is being closely monitored because the company’s earnings took a hit last year as it plowed money into its apps.

They also believe that combining the leadership position in mobile commerce with Ant Financial’s leadership position in mobile payments – with hundreds of millions mobile users already making transactions through Mobile Taobao App and Alipay Wallet – will put Alibaba in a unique position to capture growth opportunities in this market.

The devaluation of the Chinese yuan, however, means Alibaba may face an uphill battle building its cross-border business next quarter because consumers will likely have to pay more for imported goods.

For more information: Alibaba’s mostly income is mobile 

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