China-based Alibaba Group has announced its biggest earnings to date, with revenue for the quarter ended June 30 reaching $4.84 billion, up 59% from 2015. Its China commerce retail sector, which comprises nearly 80% of its revenue, surged 49% to $3.52 billion, the highest growth rate since Alibaba’s record-breaking IPO in 2014. The revenue growth contributed to Alibaba’s stock increasing 5% to $92.10 in the New York Stock Exchange, its highest amount in a year.
The company’s international commerce wholesale business, which includes Alibaba.com, increased 15% in the quarter compared to 2015 for a total of $216 million.
“Alibaba Group had an outstanding quarter,” Daniel Zhang, CEO of Alibaba Group, said in a press release. “Our results show the scale and leverage of our ecosystem as we strengthen our competitive positions in core commerce, cloud computing and digital media and entertainment.”
Alibaba Executive Vice Chairman Joe Tsai attributed the e-commerce giant’s growth to a significant increase in mobile shopping, which has surpassed non-mobile use for the first time. Mobile revenue reached $2.64 billion for the quarter, an increase of 119% year-over-year, representing 75% of total China retail marketplaces revenue.
Alibaba Cloud, the company’s cloud computing business, increased customers to 577,000 and drove revenue growth by 156% year-over-year. The service launched 319 new products and features in the quarter and formed a joint venture with telecommunications juggernaut SoftBank to launch cloud computing services in Japan.
“We are poised for strong profitable growth into the future,” Zhang said. “We are changing the way our 434 million active buyers engage with our platform as we introduce social, community and personalization driven by smart data into our e-commerce marketplaces, realizing our vision of Live@Alibaba.”
In the midst of the successful quarter, Alibaba continues to face legal and regulatory scrutiny. Earlier this month, a U.S. judge dismissed claims in a lawsuit that Alibaba Group Holding Ltd. and merchants on its platforms partnered to profit from the sale of counterfeit goods. The judge said that Gucci, Balenciaga, Yves Saint Laurent and other brands owned by Paris-based Kering SA “failed to allege the existence of a conspiracy” between Alibaba and its merchants. Kering's lawsuit also alleges that Alibaba encourages the sale of fake goods on its platforms by allowing its search engine to suggest terms such as “cucchi” and “guchi” when “Gucci” is typed into search bars.
Still, Alibaba was verbally reprimanded last week by a Chinese regulator for the proliferation of counterfeit goods on its websites. “I’ve repeatedly emphasized to Jack Ma that you [Alibaba] are not outside the law,” Zhang Mao, head of the State Administration for Industry and Commerce said in a television interview, according to Fortune. “You must take the primary responsibility.”
Last month, Alibaba launched the Intellectual Property (IP) Joint-Force System, an expansion of Alibaba’s existing Good Faith Takedown program which combats the presence of counterfeit products on its retail platforms.
The company is also still under investigation by United States securities regulators over the e-commerce giant’s accounting practices. The Securities and Exchange Commission (SEC) is looking into how Alibaba accounts for affiliated companies, including a logistics venture, and how it treats related-party transactions.