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Alibaba strikes it rich
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Alibaba.com yesterday said the global economic slowdown is unlikely to have a great impact on the company's business performance this year.

Releasing the annual results, Wei Zhe, CEO of Alibaba.com, said the company will continue to see dynamic growth this year despite the uncertainties in the world economy.

"I think we will maintain fast growth this year because people in difficulties tend to diversify their product sourcing and supply in order to reduce risks," he said. "I think e-commerce could help them do that better on a global scale."

Wei said Alibaba.com plans to open a joint venture with Softbank in Japan this year and will increase its business presence in Europe and India to seek greater international opportunities.

Alibaba.com is China's largest business-to-business website. It started out helping millions of Chinese small and medium-sized enterprises sell their goods on the Internet.

Last year, the company's revenue grew 58.6 percent to 2.16 billion yuan and its net profit surged 340 percent to 968 million yuan, according to Alibaba's first financial report released yesterday after its startling $1.7 billion IPO in Hong Kong in October.

Wei attributed the rapid growth to the rise in the number of the company's paying members and their increased average online consumption.

"The number of our paying members surged 39.5 percent to over 300,000 last year and their average consumption also increased, which boosted our revenue and profit."

China had 210 million Internet users by the end of last year. Research firm BDA said earlier last week that China has already surpassed the US to become the world's largest Internet population.

But a report last year by CNNIC (China Internet Network Information Center) said the e-commerce adoption rate is still lower in China, with the usage rate of online sales and online shopping in the country reaching only 4.3 percent and 25.5 percent - much lower than the corresponding 15 percent and 71 percent in the US.

According to Alibaba.com, 72 percent of the company's revenue came from online trade between China and foreign countries and only 28 percent from trade within China.

Wu Wei, CFO of Alibaba.com, said the company's revenue from domestic trade will continue to rise as China's internal demand booms.

Alibaba's shares fell by a record 21 percent to HK$12.20 in Hong Kong before the earnings announcement, compared with a 1.4 percent gain on the benchmark Hang Seng Index.

(China Daily March 19, 2008)

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