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Alibaba surprises market with 14% increase in quarterly sales amid economic headwinds

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2023-08-11

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Chinese e-commerce giant Alibaba has unveiled an unexpected surge of 14 percent in year-on-year quarterly sales, defying recent economic challenges and deflationary pressures.

As a pivotal player in China's expansive digital economy and the operator of a prominent online shopping platform, Alibaba's performance has come to symbolise the pulse of domestic consumption, which has shown signs of waning in recent months. This development arrives as China experienced its first deflation since 2021, a reflection of the broader slowdown in the world's second-largest economy.

Alibaba's financial report for the initial quarter of the fiscal year, commencing on April 1, disclosed revenue of 234.1 billion yuan (approximately $32.5 billion USD), surpassing predictions by market analysts. Impressively, the company's net profit also soared by 51 percent year-on-year, amounting to 34.3 billion yuan during the April to June period.

This financial accomplishment coincides with Alibaba's monumental restructuring, deemed the largest in its history. The strategy, unveiled in late March, involves dividing the conglomerate into six distinct entities that will be independently capable of pursuing funding through public listings. In a statement, CEO Daniel Zhang stated, "Alibaba delivered a solid quarter as we continue to execute our reorganisation, which is beginning to unleash new energy across our businesses."

Daniel Zhang, a pivotal figure in the company's early growth, is in the process of transitioning out of the CEO role while retaining leadership of the lucrative cloud computing branch, an area where Alibaba has made substantial investments. The leadership transition is set to take effect on September 10. Zhang assumed leadership of the Alibaba empire following the departure of founder Jack Ma in 2019.

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