Sales on Alibaba have defied expectations and that is bringing new hope for stability and growth in the Chinese economy.
Sales of Alibaba Group Holding have risen to heights that have crossed the expectations of the market experts. This has definitely defied the signs of slowdown of the native Chinese economy. The sales of the company have risen by a third which is a large jump as its share in the mobile shopping arena has increased. The shares of the company have risen in value sharply. The sales have moved up to 32 percent, leading to a total earning amount of 2.2 billion yuan. This has been the earning for the three months to September as the end month. This has defied the estimates of the market experts. As a result of the surge in sales figures the shares have risen by twelve percent in the pre trading scenario. The company had launched its public offering last year, after which its stocks are at the best high this month.
Performance of the company
Part of the success story of the company can be attributed to the partnerships that have been forged with retailers like Suning Commerce Group which is a chain of electronic stores. It also offers cloud based services to the different merchants. This has helped to increase transactions even when the economy has been growing slowly at a rate that is the lowest in the last 25 years. Similar signs of a sluggish economy are surfacing like in the UK (check out UK Economic Growth Slowdown is Feared from Second Quarter Performance).
Another reason that can be attributed to the success of the company is increased events for promotions that the company has driven consistently. The Tmail.com is a forum for promotions on the site as well as Taobao marketplace that has driven sales on shopping events in the country.
The result of the right strategies and promotional deals was seen when its net income reached the 22.7 billion yuan level which was a 32 percent jump. There was also a gain in the market value of Alibaba Health Information Technology Ltd which is a separate company in which the parent company has a measurable stake. The combined effects have been startling and surpassed the expectations of the experts.
Economic state of the country
The economic growth of the company has dropped to its lowest level, which was last seen in the late part of the seventies. However, the chairman of the company, Jack Ma is confident of the economy being able to support the growth of the company and he has plans to take on more acquisitions. The company has been involved in deals worth fifteen billion this year, which has tripled from the figure achieved in 2014.
The company’s growth might show the nascent demand for mobile shopping that is surging up and which has been undermined in the latest state of affairs. With the online world opening up more and more of the country, Alibaba is aggressively looking at investing in several services that involve online to offline transactions. This might be one of the signs that the slowdown of the Chinese economy is not as bad as it looked and the winter might just bring about a ray of hope for the New Year for the global economy as well.