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Significant revenue growth for Alibaba in 2018 fiscal year

By He Wei in Shanghai | | Updated: 2017-06-08 20:29

Alibaba Group Holding Ltd has reported a 45 to 49 percent growth in revenue guidance for the 2018 fiscal year.

The dramatic jump has beaten analysts' estimates by a wide margin, as the internet behemoth strives to consolidate position in the fierce business-to-customer segment.

Alibaba's chief executive officer Daniel Zhang, who addressed the Investor Day in Hangzhouon Thursday, said the growing stickiness of users coupled with data technologies, which facilitate online shopping, would drive sales to a record high and boost gross merchandise to a volume of $1 trillion by 2020.

Zhang added the figure range compared with the 56 percent growth posted for the 2017 fiscal year,which ended on March 31. At the same event last year, the firm predicted a growth of 48 percent in revenue.

Given the already-bulky customer base , the projection has surpassed the expectation of investors. For instance, Citi Research modeled the 2018 fiscal revenue to grow 34.7 percent year-on-year, according to the South China Morning Post.

Chief financial officer Wu Maggie said, in a presentation on (insert date), the company wouldreinvest funds to expand the consumer base, as well as improve the experience of quality consumption in a bid to gain the B2C market share.

The Alibaba's Tmall site, which currently stood as the world's largest e-commerce company, had further been challenged by Inc at home. It reported its first quarterly earnings of 239 million yuan ($35.2) for the three months of the year, since it listed in 2014.

Wu said the optimism in revenue forecast wason the back of technologies, as well as being able to provide more content to enhance the level of engagement and stickiness to various platforms.

Zhang added the adoption of artificial intelligence, as well as big data and cloud computing, was set to revolutionize the online retail landscape by adopting an uncannily precise product search. The move would also include improving relevant and holistic recommendations based on shopping habits, and virtual store fronts displaying tailored product information, Zhang noted.

Alibaba's core commerce segment, which includedits iconic Tmall and Taobao marketplaces, have further brought in 60 percent of the company's online embryo's profitability in the last year.

The company had also branchedout overseasand secured 80 million annual active users outside of China via its indigenous foreign marketplace,Ali Express and Lazada Group, which had been acquired by the Southeast Asian e-commerce group last year.

However, Wu said the potential remained huge as they only combined one to two percent of last year's total revenue.

Zhang said other new business lines has also been gaining traction, with cloud computing transforming from an infrastructure provider to an application-enhanced service.

Wu further noted the segment was steadily narrowing the negative margin and was close to reachingbreak-even.

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