Alibaba the Chinese e-commerce giant reported tremendous fiscal second-quarter earnings on Wednesday.
This huge growth is attributed to its rise in its e-commerce business and doubling of revenue from cloud computing. Aliyun, the cloud computing business of Alibaba saw the rise in its sales to a tune of 130% which is equivalent to around US $224 million.However, the net profit of the company was not a promising figure as the company suffered a slid of 66 percent to 7.62 billion yuan. The success in cloud computing is clearly reflected by an increase in its paying customers which rose from 577,000 in the previous quarter to 651,000.
Alibaba Base Strong
Alibaba had established its cloud computing business in the year 2009 by acquiring Hi China, the largest web hosting service and domain registration company in China. The company performed exceptionally well and in the year 2014 entered into the partnership deal with Inspur which strengthened its base. Aliyun has its R&D centers in Singapore, Silicon Valley, Beijing, Hongkong, and Hangzhou. Recently, more than 40,000 developers from around 58 countries attended an annual Alibaba conference for cloud computing and artificial intelligence in Hangzhou. After the announcements, the shares rose as high as 2.9%, however, the day ended with a down of 2.6%. The company has also performed brilliantly in its digital and entertainment segment showing growth as high as 302 percent.
Alibaba Going Forward Prospect
The company has tremendous potential in future as the technical sector is undergoing a massive change.With the constant increase in the number of people using the digital infrastructure, the company is speculating increase in its user base. Alibaba is also planning to explore new markets for its various ventures like e-commerce, digital segment and cloud computing.However, the recent plans of Amazon to extend Amazon prime to China will lead to intense competition between the two firms.As the company is under able guidance only time will tell how high Alibaba will fly.