Alibaba Group Holding Ltd. (NYSE: BABA) has revealed that it exceeded its revenue forecasts for Q4 2023 and enjoyed a 7% year-over-year revenue increase to bring in a whopping $30.73 billion. The Chinese technology company notes that the unexpected growth was largely due to the success of its cloud and e-commerce businesses, which helped it surpass the $30.4 billion consensus estimate set forth by Bloomberg.
Furthermore, Alibaba’s earnings for fiscal year 2024 have seen an 8% year-over-year increase to $130.13 billion, which allowed the technology multinational to distribute $4 billion in dividends to its shareholders. Chief financial officer Toby Xu says the company has begun seeing the initial results from boosting investment in its “strategic business priorities” and has confidence in its business outlook.
Rising investments were largely responsible for a 5% drop in Alibaba’s adjusted earnings before interest, taxes and amortization (EBITA) but focusing on its core cloud and e-commerce businesses helped the company achieve double-digit growth in critical areas such as gross merchandise value (GMV). According to Alibaba CEO Eddie Wu, the fourth quarter’s results show that the Chinese company’s growth strategies work and that Alibaba is enjoying increased growth.
As a testament to Alibaba’s improving performance, its e-commerce businesses surged in the fourth quarter, thanks to a rise in purchase frequency as well as customer retention even though there was a general decline in retail growth across the Chinese market. Its online retail subsidiary Taobao and Tmall Group (TTG), for instance, reported a 4% growth in revenue that brought its earnings for the quarter to $12.88 billion.
Like Alibaba, Taobao and Tmall Group’s adjusted EBITA fell slightly as TTG increased investment in critical areas of its business such as customer service. Both Tmall and Taobao worked to improve customer experience by taking advantage of user-friendly measures such as website updates and simple sales structures. Additionally, membership in Alibaba’s 88VIP loyalty program saw a double-digit increase from the same quarter last year to more than 35 million members due to the enhanced benefits and services ordered to members.
Revenue from cloud services, the other half of Alibaba’s core business, went up by 3% to $3.6 billion, thanks to significant growth in Alibaba Cloud‘s public offerings. The company’s artificial intelligence-related products were especially popular, enjoying triple-digit growth thanks to the ongoing AI revolution. Alibaba also cut the prices of more than 100 of the cloud products available to the public to attract small businesses and startups; the company is also set to extend the price reductions to international markets in April.
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