Alibaba.com Ltd, China's biggest trading Website for companies, yesterday said third-quarter profit rose 49 percent as slowing exports prompted more Chinese businesses to use its services to find domestic buyers for their goods.
Net income rose to 308.6 million yuan (US$45 million), from 207.3 million yuan a year earlier, the company said in an e-mailed statement. Profit exceeded the 295-million-yuan median of three analyst estimates in a Bloomberg News survey. Sales rose 37 percent to 780.2 million yuan.
More Chinese companies began using Alibaba's Website to find domestic buyers as the worst financial crisis since the Great Depression eroded overseas demand for their shoes, toys and electronics. Alibaba, a unit of Hangzhou-based Alibaba Group Holdings Ltd, has also introduced memberships that require lower fees to lure more customers to its Website.
"The new membership is likely to cater for small and medium enterprises which have to cut back their ad spending," CLSA Ltd analyst Elinor Leung wrote in an earlier report. Alibaba will also increase marketing spending to attract users in the United States and Europe, according to Leung.
The company's shares rose 0.2 percent to close at HK$4.80 (62 US cents) in Hong Kong trading. They've fallen 83 percent this year, against a 50-percent fall in the city's benchmark Hang Seng Index.
Alibaba said it plans to spend up to HK$2 billion to buy back stock until next year.
China on October 29 cut interest rates to stimulate growth in the world's fourth-largest economy after the global financial crisis curbed exports and output. The government this month also began giving textile and clothing exporters larger tax rebates.
(Shanghai Daily November 12, 2008)