In its first earnings report since its record-breaking IPO in September, the Chinese e-commerce giant also reported that the number of consumers shopping its online marketplaces increased 52% year over year in the quarter ended Sept. 30. Marketplace sales exceeded $90 billion in the quarter, more than the combined sales on Amazon and eBay sites worldwide.

So that’s why Alibaba is the world’s most valuable e-commerce company.

In its first quarterly earnings report since its record-breaking debut on the New York Stock Exchange in September, Alibaba Group Holding Ltd. reported today 49% year-over-year growth in purchases on its online shopping portals and 52% growth in the number of consumers shopping those marketplaces. Revenue grew 53.7% to $2.74 billion in the quarter and the Chinese e-commerce giant reported net income of $494 million.

“We delivered a strong quarter with significant growth across our key operating metrics,” says CEO Jonathan Lu. “Our business continues to perform well, and our results reflect both the strength of our ecosystem and the strong foundation we have for sustainable growth.”

The value of goods sold on Alibaba’s marketplaces totaled $90.5 billion in the quarter, more than the sales on Amazon.com Inc. and eBay Inc. sites worldwide during the same three-month period. EBay reported gross merchandise value, excluding auto sales, in its third quarter ended Sept. 30 of $20.08 billion. Amazon doesn’t report gross merchandise value, but Internet Retailer estimates the value of goods sold by Amazon itself and by merchants selling on Amazon sites was around $50 billion in the quarter.

As with companies like Facebook Inc. and Google Inc. that initially established their dominance when consumers mainly accessed the Internet via personal computers, Alibaba was at pains today to emphasize its growth from mobile shoppers. The company said purchases via mobile devices accounted for 35.8% of the value of goods purchased on its sites, and that 188 million consumers each month are active on its sites.

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Most of Alibaba’s revenue comes from its two giant online marketplaces in China, Taobao and Tmall, which together offer more than 1 billion products. Taobao is open to any Chinese resident, and Alibaba says 8.5 million sellers offer their goods each year on the wide-open online bazaar. Tmall, which is geared to larger companies, including major international brands, featured goods from more than 110,000 brands as of June 30, Alibaba says.

For the quarter ended Sept. 30, Alibaba reported:

  • The value of goods sold on its China marketplaces increased 48.7% to 555.666 billion RMB ($90.5 billion) from 373.659 billion RMB ($60.9 billion). Sales on Taobao increased 38.2% to 379.832 RMB ($61.8 billion), while Tmall sales grew 77.8% to 175.834 billion RMB ($28.647 billion). Taobao accounted for 68.3% of China marketplace sales in the recent quarter, compared to 73.5% a year earlier, reflecting in part the decisions by such international brands as Apple Inc. and Burberry to sell on Tmall in the past year.
  • Revenue totaled 16.829 billion RMB ($2.742 billion), a year-over-year increase of 53.7% from 10.950 billion RMB ($1.784 billion).
  • The number of consumers who have shopped on Alibaba sites in the past year reached 307 million, a 52.0% year-over-year increase from 202 million.
  • Mobile monthly active users increased 138.5% to 217 million from 91 million.
  • Mobile revenue totaled 3.719 billion RMB ($606 million), more than 10 times the mobile revenue of 332 million RMB ($54.0 million) in the same period a year earlier.
  • Net income of 3.030 billion RMB ($494 billion), a decrease of 38.6% from 4.937 billion RMB ($804 million). Alibaba attributed the decrease in net income to the cost of share-based compensation to employees, and to costs associated with several recent acquisitions, including UCWeb Inc. and AutoNavi. Alibaba says it booked $490 million in costs in the quarter associated with giving stock grants to employees in advance of its IPO.

Shares of Alibaba, which trade under the symbol BABA, were up 3% in early trading today on the New York Stock Exchange.

“Alibaba can keep growing fast for the foreseeable future,” commented Guo Hui, a senior analyst at TD Ameritrade. He notes Alibaba accounts for 80% of online retail sales in China and that the Internet penetration in China is only 45%, well below that of many Western countries.

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As of this morning, Alibaba had a stock market value of more than $263 billion, compared to $140 billion for Amazon and $65.4 billion for eBay.

Amazon is No. 1 in the 2014 Internet Retailer Top 500.

While many focusing on the big retail marketplaces in China that account for most of its business, Alibaba also disclosed details on three smaller business units:

  • Revenue from its international sales to consumers nearly doubled from 210 million RMB ($34.2 million) in the year-ago quarter to 419 million RMB ($68 million). This mainly reflects sales on AliExpress.com, a marketplace where Chinese companies sell to consumers overseas, a business Alibaba launched in 2010.
  • Revenue from Alibaba’s international wholesale e-commerce business, which lets companies outside of China—including many retailers—buy in bulk from Chinese companies via Alibaba.com grew 24.0% to 1.198 billion RMB ($195 million) from 966 million RMB ($157.3 million) a year earlier.
  • Revenue from Alibaba’s wholesale business in China increased 39.1% to 790 million RMB ($129 million) from 568 million RMB ($92.5 million). Alibaba launched 1688.com in 2010 as a site where Chinese retailers can buy in bulk from Chinese manufacturers, wholesalers and distributors.

 

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