Alibaba net profit soars 35% as Singles Day pays off

Chinese e-commerce giant Alibaba Thursday posted a 35 percent surge in net profit in the third quarter, fuelled by a record-breaking sales bonanza during its annual Singles Day shopping festival.

The company said profit jumped to 24.1 billion yuan ($3.7 billion) between October and December, compared to 17.9 billion yuan in the same quarter in 2016.

Alibaba runs an annual promotion on November 11 that draws the country’s growing consumer class which can buy an array of products at the click of a button on their smartphones.

Last year’s event recorded 168.2 billion yuan ($25.9 billion) in payments, a 39 percent increase from the 2016 festival.

Rivals such as JD.com had also reported brisk business on November 11.

“Alibaba had another great quarter driven by the continued strength of the Chinese consumer and the wide and innovative range of services we provide for merchants and consumers,” Alibaba chief executive Daniel Zhang said in an earnings report.

“We are excited by the continued momentum in new retail, which came to life during another record-breaking 11.11 Global Shopping Festival,” Zhang said.

Alibaba, which has made billionaire founder Jack Ma one of China’s richest men and a global e-commerce icon, has been on a roll, regularly beating revenue estimates.

The New York-listed company said revenue jumped 56 percent to 83 billion yuan ($12.76 billion) in the quarter.

The shopping platform also continued to attract new customers to its platform, key to maintaining its dominance in China, where trends and shopping preferences can shift quickly.

The number of active consumers on its retail marketplaces reached a new high of 515 million, the company said, an increase of 27 million from the 12-month period ended September 30, 2017.

Also on Thursday, Alibaba announced it would formally take a stake in its affiliated business unit, Ant Financial which operates the massively popular Ali Pay mobile payment application and credit scoring unit Sesame Credit, among other financial services businesses.

Alibaba said it would take a 33 percent stake in Ant Financial, controlled by Alibaba founder Jack Ma, which had been held as a separate company but part of the Alibaba Group.

Alibaba said it would acquire newly issued shares from Ant Financial in exchange for certain intellectual property rights held by Alibaba but connected to Ant Financial.

The step is a sign that Ant Financial is on a path to its own public listing soon, with Alibaba’s equity stake likely to resolve some lingering legal issues.

In 2016, Ant Financial raised $4.5 billion at a roughly $60 billion valuation.