China demand leads to rise in Alibaba quarterly profit

A cyclist rides past a signboard of Alibaba Group in Hangzhou city, East China's Zhejiang province, June 25, 2014. [Photo/IC]

Alibaba Group Holding Ltd said on Thursday its profit rose 27 percent from a year ago in the fourth quarter, as the e-commerce giant attracted more users and reported a continuing surge in online sales.

The company said profit during the fourth quarter of 2015 was 19.11 billion yuan ($2.9 billion). During the annual Nov 11 online shopping festival the company clocked transaction revenue of 91.2 billion yuan in a 24-hour period.

The record-breaking sales event helped Tmall, the business-to-customer platform of Alibaba, post net growth of 126 billion yuan in gross merchandise volume. According to its financial report, Alibaba's revenue jumped 32 percent year-on-year to 34.54 billion yuan in the fourth quarter.

Zhang Yong, chief executive officer of Alibaba, said the company achieved a new milestone of 400 million annual active buyers last year and managed to maintain its lead in mobile e-commerce in China.

"We remain focused on our top strategic priorities, including global imports, rural expansion, increasing our footprint in first-tier cities and building a world-class cloud computing business,"he said.

"The strong Tmall gross merchandise volume and better Taobao monetization drive helped achieve better financial results,"said Hou Tian, an analyst with independent consultancy T H Capital LLC.

She said the company is working out its issues, such as mobile adoption rate, monetization rate and gross merchandise volume growth, and they believe the hardest time is almost behind Alibaba. "In fact, we will start seeing stable margins and growth".

Statistics from China's National Bureau of Statistics showed that overall transactions in China's retail sector during the last quarter were 8.49 trillion yuan. Transactions on Alibaba's online retail platforms accounted for about 11.3 percent of the total, it said.