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Alibaba's Q2 Sales Increase 60%

(10/18/2013)

A presentation released this week by Yahoo – a significant Alibaba stakeholder – shows the China-based e-commerce firm increased its second-quarter sales to $1.73 billion, a 60% year-over-year gain. Additionally, Alibaba's Q2 net profit more than doubled to $707 million, while its operating profit jumped to $856 million, up from $372 million a year earlier. The presentation effectively showed Alibaba has an operating profit margin of almost 50%.

With its second-quarter results, investors now expect Alibaba to be valued at up to $120 billion – rivaling Facebook's 2012 IPO – when it eventually goes public on either the New York Stock Exchange or the Nasdaq Stock Market. While its sales fall short of those generated by Amazon, many consider Alibaba the world's largest e-commerce platform, based on total volume of merchandise. The firm's flagship site in particular, Alibaba.com, is a competitor to ad specialty industry companies, offering dozens of promotional product categories.

Under the Alibaba Group umbrella, Taobao is the company's largest entity, hosting an estimated 800 million items listed by seven million merchants. In 2012, the combined total volume of merchandise handled by Taobao and B2C site Tmall surpassed $160 billion. By comparison, Amazon's volume of merchandise was $86 billion, according to RetailNet Group.

While Alibaba's strength is in China – as it contributes, by some estimates, up to 2% of the nation's GDP – the company continues to make a push in the U.S. Most recently, Alibaba led a $206 million investment in retail website ShopRunner – which competes with Amazon Prime.

Founded in 1999, Alibaba is run by Jack Ma, a member of Counselor's Power 50.



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