Business

Alibaba sets its sights on Singles Day

Alibaba logo Image copyright Reuters

Alibaba, China's biggest online retailer, said a US investigation would not affect next week's Singles Day - its biggest shopping day of the year.

The Securities and Exchange Commission is examining the accounting methods the company uses for Singles Day sales.

Last year's event generated record-breaking sales of more than $14bn for Alibaba's sites such as Taobao.

Singles Day, held every year on 11 November, is also referred to as Double Eleven because of its date.

Alibaba said in late May that the SEC had begun its investigation earlier this year.

Some merchants in China have questioned whether results from Singles Day, where consumers are offered big discounts, are as high as Alibaba has reported.

Last year's total exceeded the combined sales of the Black Friday and Cyber Monday shopping events in the United States.

The SEC had told the company that its investigation did not mean it had breached any laws.

Former English teacher Jack Ma founded Alibaba, which floated on the New York Stock Exchange in September 2014. Its shares soared 38% on the first day of trading to $93.89, valuing the business at $231bn.

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The stock fell below $60 in September last year, but has since recovered. Shares were 1.7% higher on Wednesday at $102.67 after Alibaba reported a better-than-expected 55% rise in revenue to $5.14bn for the three months to September, while net profit rose 41% to $1.94bn.

That was the second successive quarter of strong results, suggesting the company can still generate robust growth despite concerns about the Chinese economy slowing down as consumers curb spending.

'Huge potential'

Alibaba - by far China's biggest online retailer - said e-commerce sales rose 41% to $4.27bn compared with the same period last year.

Revenue from its digital media and entertainment division soared just over 300% to $541m, while the cloud computing unit posted a 130% rise in sales to $224m.

Daniel Zhang, chief executive, said the group saw "huge potential" in the newly integrated media business, which includes Youku, the third most popular online video site in China.

"By combining engaging online experiences with highly relevant content, we delivered impressive financial and operational results in the quarter," he said.

Maggie Wu, chief financial officer, said Alibaba expected the two divisions, along with its "innovation initiatives" unit, to "drive long-term value for both our customers and shareholders".

The company has also been seeking growth outside China as that market becomes increasingly saturated. It bought south-east Asian online retailer Lazada Group for about $1bn in May.

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