HONG KONG -- Shares in China's largest e-commerce company Alibaba Group Holding on Thursday jumped more than 4%, following its announcement that its quarterly net income had reached 14.03 billion yuan ($2.1 billion), a 96% leap on a year-on-year basis.
The e-commerce company's revenue grew by 56% from a year ago to reach 50.18 billion yuan during the three months to June 30, pushed up by China's growing demand for online shopping. This easily surpassed the average estimate by analysts polled by Thomson Reuters of 47.70 billion yuan, or a 48.4% increase on the year.
Following the announcement, New York-listed Alibaba shares jumped more than 4% to $166.38 during the early morning trade on Thursday, pushing them about 90% higher compared to the beginning of 2017.
Revenue in its core commerce sector grew 58% on the year, supported by growing average spending per merchant and a rise in the number of paying merchants, which "reached a historical high during the quarter," according to the company's earnings report.
China's ongoing trend of more consumers buying products online drove Alibaba's revenue during the quarter. According to China's National Statistics Bureau, online consumption in the first half of 2017 grew more than 33% from a year ago.
EMarketer's senior forecasting analyst Shelleen Shum viewed the rise of consumerism and a growing prominence of internet-savvy buyers in China as the driver of the nation's e-commerce. "Alibaba is well poised to maintain its leadership position in China's e-commerce and digital ad market," Shum said.
During the first quarter, Alibaba also piggybacked on its smaller rival JD.com's biggest sales event for its anniversary on June 18. Nomura analyst Jialong Shi said that "Ali[baba] surprisingly shared part of the promotion and couponing costs, instead of leaving them all to be borne by merchants as it did previously." Shi added that these changes were meant "to woo the support of big brands and merchants and to exert pressure on JD."
Alibaba also enjoyed a robust growth in its cloud computing business during the quarter, with an explosive 96% revenue growth from a year ago to 2.43 billion yuan. Although the company's management once again stressed that the business was still at an "early stage," paying customers are growing rapidly. Paying customers surpassed the 1 million mark for the first time compared to 577,000 a year ago.
Meanwhile, the company is also accelerating its international business. In June, Alibaba increased its stake in Singapore-based online mall Lazada Group to 83% from 51% with a $1 billion investment.
CEO Daniel Zhang Yong also confirmed during a conference call held shortly after the results came out that the company had led a $1.1 billion investment in Tokopedia, the Southeast Asian retailer.
Zhang said that Indonesia was "a very, very important market," as it had "not only B2C opportunities but C2C also has a good potential." As Alibaba-owned Lazada operates across Southeast Asian countries including Indonesia, Zhang said, "we anticipate that we can generate a lot of synergies and chemistries in the Indonesian market."
Alibaba's global expansion amid Chinese consumers' growing demand for imported products boosted quarterly revenue growth of the company's international and cross-border consumer businesses, which shot up by 136% from a year ago.