Alibaba Surpasses 3Q Estimates With 41% Climb in Revenue

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The headquarters of private e-commerce giant Alibaba Group in Hangzhou, capital of Zhejiang province.

Alibaba reported better-than-anticipated fiscal third-quarter earnings on Wednesday, though revenue fell short of estimates.

The results of the company display strength in the country's consumer economy that is being driven by an increasing base of affluent young consumers.

Revenue growth, the key measure of the company's business health, indeed slowed in the quarter.

Companies like Alibaba are at the nexus of a national economic strategy to encourage more domestic consumer spending and thereby lessen the reliance on fickle foreign demand for Chinese exports. Revenue from core commerce rose 40% to RMB 102.8 billion.

Despite this, concerns about Alibaba's ongoing war with Meituan-Dianping in the food delivery sphere remain as well as in regards to the company's current strategy of investing into offline retailers in order to integrate online and offline commerce.

On the economy, Tsai noted that consumer consumption in China remains robust as the middle class there is set to grow to 850 million people by 2030.

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USA -listed Alibaba's stock rose 2.3 percent to $160.50 during pre-market trading on January 30. Bloomberg analysts expected revenue of Dollars 17.77 Billion and earnings of USD 1.68 per share.

The 41pc growth announced on Wednesday was the weakest Alibaba had recorded in three years.

Alibaba's chief executive officer, Daniel Zhang, called the quarter "strong" for the company.

Alibaba Group Vice Chairman and Co-founder Joe Tsai, in remarks made to analysts Wednesday morning and emailed to Retail Dive, pushed back against the idea that any of that would cause much of a ripple for the company's fortunes - echoing comments by Alibaba Group President J. Michael Evans during a panel at the National Retail Federation's Big Show in NY earlier this month.

As some USA companies blame China's economy for their earnings misses, China's Alibaba has offered some upbeat notes about the world's second-largest economy amid growing concerns of a slowdown.

Cloud computing is a bright spot for Alibaba.