Alibaba Buys Stake in Indonesian Online Retailer, Extends Global Reach
August 17 2017 - 11:02AM
Dow Jones News
By Liza Lin
Alibaba Group Holding Ltd. plans to take part in a $1.1 billion
investment in an Indonesian e-commerce firm as it seeks to expand
its footprint globally.
The Chinese online retail giant will take a minority stake in PT
Tokopedia, an internet marketplace that connects small businesses
with consumers, the Jakarta-based company said Thursday.
Tokopedia said Alibaba will be joining existing investors.
Southeast Asia, a region of more than 600 million consumers, is
attracting investment from Chinese and U.S. technology firms as
incomes and smartphone penetration grows.
The investment comes barely a month after Amazon.com Inc.
announced its entry into the region through Singapore, and follows
Alibaba's $1 billion investment to raise its stake in Southeast
Asian online retailer Lazada.
Coming up with the capital won't be a problem. Alibaba on
Thursday reported net income of $2.17 billion, for its fiscal first
quarter ended June 30, up 94% from the year before. Quarterly
revenue rose 56% from the prior-year period to $7.4 billion,
beating estimates of analysts surveyed by S&P Global Market
Intelligence. Adjusted earnings were $1.17 per share, up 65% from
the year before.
Alibaba shares were up about 4% in early New York trading. They
have gained more than 80% this year,
Alibaba operates China's two most popular online-retail
websites, Tmall and Taobao. It said sales from its core commerce
division rose 58% to $6.3 billion driven by growth in online
sales.
The company will step up its investment in the second half of
the year to expand its market share in the business-to-consumer
market, Chief Financial Officer Maggie Wu said.
Revenue at its digital-media and entertainment division rose
about a third to $602 million. Still, the unit, which includes
mobile browser UCWeb, Alibaba Pictures and video-streaming site
Youku Tudou, faces stiff competition in China's online-video space,
with many players competing for licensed content.
Alibaba Cloud, its cloud-computing arm, posted revenue of $359
million. It signed an agreement earlier this month with the Macau
city government to use its cloud technologies to help with city
management.
Alibaba's results, however, were dampened by a warning from the
Zhejiang branch of the Cyberspace Administration of China, the
country's internet regulator. The regulator ordered five websites,
including Taobao, to remove vendors that sell illegal virtual
private networks, or VPNs, that allow internet users to circumvent
China's firewall.
"Taobao forbids the listing or sale of any products that are
forbidden by applicable law," an Alibaba spokesperson said. "We
will continue to strive to ensure that third-party sellers comply
with applicable law and marketplace rules."
Alibaba, founded by Chinese billionaire Jack Ma, also reiterated
its strategy to expand beyond traditional e-commerce to provide
services such as logistics, payments, and cloud to online merchants
and physical store retailers.
It has created its own brick and mortar supermarket store unit
called Hema, and shoppers staying within a certain radius of its
supermarkets can order online and have their groceries delivered in
30 minutes.
Write to Liza Lin at Liza.Lin@wsj.com
(END) Dow Jones Newswires
August 17, 2017 10:47 ET (14:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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