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An analysis of GlobalData's Filing Analytics database reveals that despite the challenging business conditions, Alibaba's year-on-year (Y-o-Y) revenue grew by around 22% in Q1 2020. The double-digit revenue growth was due to the COVID-19 driven cloud services boom, strong Chinese retail performance and rising traction in the new retail segment (includes offline-online integrated B2C retail). GlobalData’s Filings Tool identified that mentions of ‘new retail’ grew in the Q1 2020 earnings transcript.
Tmall (part of Alibaba’s online B2C Chinese retail services) witnessed Y-o-Y gross merchandise volume (GMV) increase of 10%. Tmall online was boosted by the rising demand for daily essentials, household goods, and consumer electronics, which collectively grew by 25% Y-o-Y. Alibaba’s monthly mobile active users also rose by about 3% by the end of March 2020 compared to December 2019, as COVID-19 boosted the usage of its e-commerce platforms.
‘Cloud’ was the most discussed theme in Alibaba’s Q1 2020 earnings transcript. The company's cloud computing segment has seen meteoric growth of around 58% in Q1 2020 compared to Q1 2019.
Rinaldo Pereira, Senior Analyst at GlobalData, says: “Alibaba capitalized on its strengths by integrating several physical stores via its online platforms. In China, new retail (grocery) gained traction from the booming demand for essentials. In the coming quarters, the company expects to use its cloud computing services to gain from the accelerated use of work-from-home tools and remote learning capabilities.”
Freshippo (a supermarket chain, part of the new retail segment), registered robust revenue growth due to higher online purchase frequency. In Q1 2020, 60% of Freshippo's GMV was from online purchases.
Taobao Live was another innovative Alibaba product that capitalized on the growing social e-commerce demand during the pandemic. As identified by GlobalData’s Filing Analytics database, the mentions of ‘livestreaming’ in earnings transcripts grew in Q1 2020. Alibaba's Taobao Live witnessed a daily-usage increase of 88% (Y-o-Y) in Q1 2020. According to the company, Taobao Live has become the most significant social commerce platform in China.
Pereira concludes: “Several merchants are using Taobao Live's streaming capabilities for marketing products due to social distancing norms. Alibaba foresees social distancing norms to continue through 2020 and hence focusing on further developing Freshippo, Taobao Live and Taoxianda to enhance its online-offline store integration.”
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