With economic unpredictability still looming large on the horizon, few companies enjoy the good luck of baking a cake and eating it too and Alibaba Group Holding Ltd (NYSE:BABA) is definitely one of them. What could be a better way of topping the dream IPO run than declare quarterly results which are in tandem with analysts’ predictions?
The only downside to the success story was the 39% fall in net income which founder Jack Ma attributed to the one-time expenditure accrued owing to having gifted stock awards to executives and employees. As per the founder, these rewards were doled out with the hope of retaining employees for longer duration and were also meant to acknowledge their hard work, dedication and good performance. That said, Alibaba Group Holding Ltd (NYSE:BABA) claimed that its user base has grown in number over the last few months and the company’s online shopping bonanza was witnessing maximum sales of mobile devices, particularly smartphones.
CNBC discussed the situation with an expert who happens to be an expert at Kelly-Haft Financial, namely Alan Haft and he enumerated a number of factors which were responsible for the win-win situation the company is currently in. With transactions pertaining to mobile devices accounting for 36% of its revenue, he regarded Alibaba Group Holding Ltd (NYSE:BABA) as an organization which was doing everything great. He also gave credit to Jack Ma for being a visionary founder who is projecting his country in a way that every global brand is tempted to make an entry and touch the populous middle-class segment.
Mohanbir Sawhney, technology expert, praised the company’s performance but sounded caution as well when he said –
“If I were Alibaba I would be focused like a laser beam on the core Chinese market, which really has a lot of headroom to grow. If they take their eye off that ball, there are competitors like JD.com backed by Tencent that may take away from market share.”
At present, Alibaba Group Holding Ltd (NYSE:BABA) operates through Chinese entities Taobao and Tmall.com but is looking forward to maintaining a prominent presence in western countries, particularly USA and West-European nations.
This article has been written by Vinita Basu.