Valuing an Alibaba Shopper



Number of active shoppers see a 7% annual increase

In addition to revealing its mobile MAUs (monthly active users), Alibaba (BABA) also breaks out its active shopper metrics, which it reports as annual active consumers. The previous reports captured this metric as annual active buyers.

The active consumer metric reveals the number of Chinese consumers that have remained with Alibaba for at least a year. In addition to this metric showing the size of Alibaba’s retail market, it also offers clues regarding its customer retention.

Alibaba said it finished fiscal 1Q18[1. fiscal 1Q18 ended June 2017] with 466 million annual active consumers. That implies that Alibaba’s annual active consumer base increased 3.0% quarter-over-quarter and 7.0% year-over-year.

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Consumers spending more on Alibaba marketplaces

The expansion of Alibaba’s Chinese retail market, as evidenced by the increase in annual active consumers, was also accompanied by an improvement in consumer spending on Alibaba marketplaces. For fiscal 1Q18, Alibaba disclosed that each active consumer brought in an average of 273 yuan (or $40) in revenues. This is up from an average of 202 yuan in fiscal 1Q17, as shown in the chart above.

Alibaba calculates its average revenue per active consumer by dividing its China retail commerce sales for the last 12 months by the number of active consumers for the same period.

Closely tracked metrics

The increase in the number of active consumers, as well as their increased spending levels, can be attributed to the expanding product selection on Alibaba’s marketplaces and rising Chinese consumer incomes.

Given the fierce competition that Alibaba faces from rivals such as JD.com (JD), Amazon (AMZN), eBay (EBAY), and Baidu (BIDU) in the online retail and online advertising industries, its customer growth and spending habits are closely watched by investors.


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