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While many investors ask what will happen to the mainland after the Olympics, we will also ask what Alibaba will focus on after it has announced its interim result last week.

To a certain extent, the remarks made by Alibaba chief executive officer David Wei and the result itself were aimed at easing concerns over where and how the China largest B2B website will be heading to:

Going forward, we expect the robust growth of our China marketplace to continue. The recent launches of a series of new products and services including ‘Winport’, ‘China TrustPass for Individuals’ and ‘Export-to-China’ will further expand our China marketplace and we are encouraged by the positive response these initiatives have received so far

Our China marketplace accounted for 34.0% of total revenue in the reporting period and surpassed 36.1% in the second quarter of 2008, a significant increase when compared to a 27.2% contribution to total revenue in the first half of 2007. This shows the growing importance of the China marketplace to our overall business development.

In line with Alibaba.com(1688) earlier slogan of “Back to Basic”, Mr Wei is steering his ship back, trying to capitalize on the foreseeable strong growth in China domestic market.

Alibaba.com (1688) reported earnings results for the second quarter and first half ended June 30, 2008.

It reported total revenue of RMB1,415.2 million in the first half of 2008, representing a 47.8% increase from the first half of 2007. The year-on-year growth was driven mainly by increases in the number of paying members of our combined marketplaces and in average spending per paying member of the China marketplace.

Alibaba.com (1688) had 368,006 paying members as of June 30, 2008, representing a 44.0% increase from the same period a year ago.

 

Interim Results 2008

 

Total Revenue

RMB 1415.2million

Revenue from China marketplace

RMB 481.6 million

Operating Profit

RMB 65.1 million

Net Income

RMB 697.2 million

Earning per share (EPS), basic and diluted

15.24 and 15.23 HK cents

 

 

Registered Users

 

Total no. of registered users on our marketplaces

32.5 million

No. registered users on international marketplace

5.6 million

No. registered users on China marketplace

26.9 million

 

 

Store Fronts

 

Total supplier storefronts on our marketplaces

3.7 million

Supplier storefronts on international marketplace

802,286

Supplier storefronts on China marketplace

2,968,328

 

 

Paying Members

 

Total no. of paying member

368,006

Gold Supplier

29,766

International Trust Pass

13,912

ChinaTrustPass

324,328

 

You can find a full report of the interim result here

 

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Speaking at the e-Business Champion Awards Reception in Chicago, Arthur Chang of Alibaba told AuctionBytes that the Export-to-China would be beneficial to many international traders who are not very familiar with China market.

Export to China from Alibaba

International suppliers can take advantage of the program by building their storefronts in Alibaba.com. The storefronts would then be translated from English to Chinese, being accessible to most of its 25 million Chinese members.

Mr Chang, Vice President of Global Sales, quoted the latest import and export trading figures in China, saying that the business from “export to China” has jumped 4 times in the last five years. The findings expected another continued surge in the next 10 years.

He contemplated that the trend will go on because:

  • There is a strong and staggering demand for consumers’ items from the growing middle and upper classes in China
  • In the meantime, Chinese manufacturers, who aspired to stay competitive in face of India and Vietnam potential challenges, have imported components and parts with higher quality from other countries.

Mr Chang also said North America was the second largest user base of Alibaba  international site, their members could make use of the trading platform to do sourcing, reaching out to 5 million international users coming from all over 200 countries and regions.

“One of our suppliers can cut 50% of their time in sourcing for the right trade partner,” he concluded.

 Arthur Chang from Alibaba

The program is in line with what we have discussed – “Alibaba set her sight to  UK – “Export to China, Export to the World” earlier  in March 

 

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