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What Does Alibaba’s Revenue Trend Suggest?

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Alibaba recorded its best revenue growth, amid concerns

In 2Q16, Alibaba (BABA) recorded its best top-line growth since it went public, thanks to the accelerating growth at the company’s China Commerce Retail business. This growth is particularly impressive because the company had to sidestep major macro concerns to instill investor confidence in the stock.

Meanwhile, the company’s Cloud and Digital Media and Entertainment segments are also firing on all cylinders, having witnessed strong upward trends in revenue.

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This is key to Alibaba’s revenue growth 

Alibaba’s upbeat revenue performance is driven by the strong growth of the company’s China (FXI) Commerce Retail business, which represents a large chunk of the company’s total revenue. Alibaba is also adding more social features to its mobile app, which has helped to drive the company’s mobile uptake among consumers by enhancing consumer engagement.

This move should continue to help the company create value for merchants and advertisers by acquiring, managing, and serving target consumers. The company’s ability to drive user growth and engagement will, in turn, encourage advertisers to spend more on its platform, which we’ve already seen reflected in the strong growth of the company’s Online Marketing Services business.

Meanwhile, Alibaba’s commission revenue has also been growing at a rapid rate, thanks to the increased GMV (gross merchandise volume)—primarily from Tmall’s GMV—and a favorable mix.

Continue to the next part for a closer look at Alibaba’s Global Expansion Strategy.

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