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A Look at Alibaba’s Top Line in Fiscal 2Q18

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Oct. 20 2017, Published 10:37 a.m. ET

Alibaba woos US, Canadian, and Mexican businesses

Alibaba (BABA) is scheduled to release its fiscal 2Q18 (September quarter) financial results at a time when the company has stepped up efforts to spread its e-commerce influence in China (MCHI) and internationally.

In September, for instance, Alibaba reached an agreement with Mexico’s government to help Mexican companies sell their items in China. That followed a June conference in Detroit where the company talked to US (SPY) merchants about selling to Chinese consumers through its e-commerce platform. The company held another conference in late September 2017 to show Canadian companies how they could take advantage of its platform to sell in China.

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Alibaba and JD.com in fierce domestic competition

Alibaba’s fiscal 2Q18 results also come at a time when the company’s main domestic challenger, JD.com (JD), has stepped up competition in China’s e-commerce industry. With the e-commerce market in major Chinese cities reaching saturation levels, JD.com and Alibaba seem to be in a race to unlock new growth opportunities in rural China.

On the international scene, Alibaba is competing with Amazon (AMZN) and Flipkart, backed by eBay (EBAY), for a lion’s share of India’s rapidly expanding e-commerce market. Amazon is investing $5.0 billion to grow its business in India.

Attention to Alibaba’s top line

This type of competition means that investors may be watching Alibaba’s top line when it reports its fiscal 2Q18 results on November 2, 2017.

In fiscal 1Q18 (March quarter), Alibaba generated revenue of 50.2 billion yuan, which was a 56.0% year-over-year rise, and outpaced the consensus estimate that called for revenue of 47.7 billion yuan. For fiscal 2Q18, analysts on average are expecting Alibaba to post revenue of 52.2 billion yuan.

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