Business

Alibaba is the fastest growing global retailer

The company's revenue growth of 154% in one year results from a strategy that combines online and offline operations

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E-commerce giant Alibaba entered Deloitte’s Global Powers of Retailing report in position 179 of its Top 250 ranking, while also recording the fastest among all companies year-on-year growth for the fiscal year of 2018-19. The growth of 154.4 percent follows multiple acquisitions of stakes in retail companies under its “New Retail” strategy, which it describes as “the convergence of online and offline retail by leveraging digitalized operating systems, in-store technology, supply chain systems, consumer insights and the mobile ecosystem to provide a seamless shopping experience for consumers.” 

Alibaba’s revenue from third party e-commerce platforms, marketplaces and non-retail revenue are excluded from the Global Powers of Retailing retail sales figures. The company has been expanding its owned retail operations through acquisitions primarily in China, including Intime and Kaiyuan (department stores), and Freshippo/Hema (grocery) as well as minority stakes in Auchan’s Sun Art hypermarket chain and home improvement retailer Easyhome. In June 2018, it had also acquired Trendyol, the leading online fashion retailer in Turkey.

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Results

Alibaba Group experienced robust growth across its business in 2019. “Our digital economy reached new heights with another record Global Shopping Festival for our merchants and partners. Continued investment in user engagement, especially through social commerce content, contributed to our strong gains in annual active consumers” said Daniel Zhang, chairman and CEO of Alibaba Group.

The Chinese e-commerce giant managed to post a revenue gain of nearly 40% in the three months to December 31, while earnings rose almost 50% from the same period last year. But Alibaba sounded a note of caution about the start of this year because of the coronavirus. It said the outbreak is an ongoing concern, and that it is doing all it can to help Chinese consumers cope. “In response to the coronavirus, we mobilized Alibaba ecosystem’s powerful forces of commerce and technology to fully support the fight against the outbreak, ensure supply of daily necessities for our communities and introduced practical relief measures for our merchants,” said Zhang.

Retailing in China

“Although there is uncertainty about prospects for the regional economy, with 2019 seeing China’s slowest GDP growth for 10 years at 6.1 percent, disruption to supply chains from trade uncertainty, and the new coronavirus further clouding prospects for 2020, China’s journey to being one of the world’s retail powerhouses continues,” says Zhang Tian Bing, Deloitte AP Consumer and Retail Sector leader. “In terms of the strength of domestic Chinese players, China now has two of the five fastest growing retailers in the world – Vipshop Holdings and JD.com – with JD already the world’s 15th largest retailer overall. What’s more important, China is also leading the charge in innovative retail formats that are centered around consumer moments and integrated online and offline capabilities.”