From Its U.S. Headquarters in Pasadena, Chinese Online Giant Alibaba Reports “Modest” 42% Growth

Published : Sunday, January 29, 2017 | 6:14 PM

Alibaba leased 22,000 square feet of office space in Pasadena's new Playhouse Plaza in 2016.

Alibaba, the Chinese online giant that opened its U.S. headquarters in Pasadena last year, has posted a moderate 42 percent year-over-year growth in revenue from its core e-commerce business for the quarter ending December 31, 2016.

The company’s total revenue for the quarter reached $7.7 billion, an increase of 54 percent year-over-year, with the strongest sales coming from non-core businesses such as cloud computing, media and entertainment.

Alibaba showed its commitment to entertainment when it opened the Pasadena headquarters so it could engage in co-financing work by large U.S. studios and producers to market and distribute content in China.

“This Pasadena office will be sort of the entertainment hub for Alibaba,” Wei Zhang, president of Alibaba Pictures, said at that time.

Hong Kong-based China Money Network said the quarterly results show that Alibaba may be facing a lack of new Chinese customers for its core e-commerce businesses. In December, active annual buyers stood at 443 million, up 8.8 percent year-on-year, and up only four million users, or less than one percent, from the previous quarter.

“Those buyers may be spending more money per purchase, thus supporting the increased revenue for the core segment. But for a company whose historic growth rate has been measures in new users, it’s a significant softening,” China Money Network said.

Mobile users made a far stronger showing, with monthly active users surging by 100 million, or roughly 25 percent over the same quarter a year earlier, and up almost 10 percent from the prior quarter. In fact, monthly mobile users surpassed active annual buyers by 50 million.

“This quarter we generated US$4.9 billion in free cash flow on a non-GAAP basis, enabling us to continue investing in growth areas globally, including cloud computing, digital media and entertainment and innovation initiatives, as well as core commerce,” Maggie Wu, Alibaba’s chief financial officer, said.

Revenue from digital media and entertainment increased 273 percent year-over-year to US$585 million, the China Money Report said.

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