Alibaba guides for 45-49% growth in FY18, Investors thump in cheer

MUMBAI & HYDERABAD: Alibaba Group CFO Maggie Wu said the group will look to clock an annual revenue growth of 45-49% in FY18. The figure elicited the loudest cheer from investors and analysts over a 2 hour long investor conference at the internet conglomerate’s headquarters in Huangzhou, China.

While the growth forecast implies annual revenues of almost $35 billion, the figure is lower than the 56% growth that the Jack Ma-founded internet company clocked in FY17. However, the growth figure included the financials of Lazada, the South East Asian ecommerce group which was merged into Alibaba’s financials since April. Wu stated that excluding Lazada, the firm’s growth would have been around 44-45% in FY17.

China’s biggest ecommerce company’s strong revenue forecasts and steady growth come as various investments in new business lines such as cloud, big data and artificial intelligence have paid off well.

As of March 2017, Alibaba Group saw a cash flow of $8 billion which the company said will be used to reignite some its growth engines by getting more customers on board as also expanding its business-to-consumer sales base.

One key area of focus for Alibaba Group Holdings in FY18 will be its digital media and entertainment business which is an amalgamation of its media businesses including Youku Tudou, UCWeb and Alibaba Pictures Group as well as the company's sports, games, literature, music, and the digital entertainment divisions.

Alibaba CEO Daniel Zhang said the group will invest heavily in the digital media business, as it looks to build a content generation platform including videos, movies, news, etc. The reiteration in focus is in line with Alibaba’s earlier investment commitment of $7.2 billion towards content building.

A large part of the investment will be driven towards building a content distribution platform as the company acknowledged strong synergies between its digital media and retail platform for merchant partners, said Zhang.

Zhang’s comments come shortly after its entertainment arm Alibaba Pictures acquired a majority stake in Indian ticketing platform TicketNew earlier this week. TicketNew is Alibaba Pictures’ first major acquisition in the ticketing space outside China. While neither company disclosed the financials of the transaction, TicketNew CEO had said that the Chinese group will invest about Rs 120 crores over a period of time to build the business in India.