Alibaba Group Holding Ltd (NYSE:BABA) announced, to kick off the action this week, that it generated RMB213.5 billion (US$30.8 billion) of gross merchandise volume (GMV) on November 11, 2018, an increase of 27% compared to 2017. Naturally, with pressure on both big cap tech and Chinese stocks over recent months, this former high-flyer has been beaten down. But the continued underlying growth trend in play here should be respected for anyone who values investment returns. An opportunity is brewing, as we see it.
“Today we witnessed the strength and rise of China’s consumption economy and consumers’ continued pursuit to upgrade their everyday lifestyles,” said Daniel Zhang, CEO of Alibaba Group. “Participation from the entire Alibaba ecosystem enabled our brand and merchant partners to engage with consumers like never before. Looking ahead, Alibaba will continue to lead the evolution towards the future digital economy and lifestyle.”
Alibaba Group Holding Ltd (NYSE:BABA) bills itself as a company that, through its subsidiaries, operates as an online and mobile commerce company in the People’s Republic of China and internationally.
This is Jack Ma’s Chinese version of Amazon, or so the popular understanding goes.
The company operates in four segments: Core Commerce, Cloud Computing, Digital Media and Entertainment, and Innovation Initiatives and Others. It operates Taobao Marketplace, a mobile commerce destination; Tmall, a third-party platform for brands and retailers; Rural Taobao program that enables rural residents and businesses to sell agricultural products to urban consumers; 1688.com, an online wholesale marketplace; Alibaba.com, an online wholesale marketplace; AliExpress, a retail marketplace; Lazada, an e-commerce platform; and Lingshoutong, a digital sourcing platform.
The company also provides pay-for-performance and display marketing services; and Taobao Ad Network and Exchange, a real-time bidding online marketing exchange in China; and digital payment and financial technology platform services.
In addition, much like Amazon, it offers cloud computing services, including elastic computing, database, storage, virtualization network, large scale computing, security, and management and application services, big data analytics, a machine learning platform, and Internet of Things and other service for enterprises; and payment and escrow services; and movies, TV drama series, online dramas, variety shows, news feeds, games, literature and music, and other areas through various content platforms, as well as develops and operates mobile browsers.
Further, the company provides AutoNavi, a mobile digital map, navigation, and real-time traffic information; DingTalk, a proprietary enterprise communication and collaboration platform; and Tmall Genie, an AI-powered voice assistant, which helps consumers to shop, order local services, search for information, control smart appliances, and play interactive content.
… If You Listen Hard Enough
As we discussed earlier, BABA recently announced that it generated RMB213.5 billion (US$30.8 billion) of gross merchandise volume (GMV) on November 11, 2018, an increase of 27% compared to 2017.
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things. BABA shares have been relatively flat over the past month of action, with very little net movement during that period.
According to the release, “The 11.11 shopping festival began in 2009 with participation from just 27 merchants as an event for merchants and consumers to raise awareness of the value in online shopping. Last year, over 140,000 brands and merchants participated in the global shopping event, with consumers spending RMB168.2 billion during the 24-hour period.”
Alibaba Group Holding Ltd (NYSE:BABA) generated sales of $12.5B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -1.4% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($26.4B against $24.4B).