Alibaba Group Holding Ltd (BABA): Mobile Is Key, Says Duncan Clark

Fears about Alibaba Group Holding Ltd (NYSE:BABA)’s performance in the just-ended January to March quarter were alleviated by the advances made by the company in the mobile space, Duncan Clark says in a discussion about the electronic commerce giant on CNBC.

Clark, chairman and founder of BDA China, says that Alibaba Group Holding Ltd (NYSE:BABA)’s business may be slowing but the company still has huge volumes. What observers are seeing is that the company is on track to hit an annualized revenue of over $11 billion, he says.

“The key metric people are focusing on is mobile as we have just heard from the incoming CEO. Had they not been making that big leap, there would have been concerns. There would have also been concerns about revenue as well as GMV [gross merchandize volume] but we’re seeing they are executing on both,” he tells CNBC.

Nonetheless, Clark does admit that there is still the question of whether Alibaba Group Holding Ltd (NYSE:BABA) can keep the profits up on mobile as much as on the desktop. However, because everybody knows that everything is shifting to mobile, there is a big increase now in advertising over mobile which is a key driver for the company, he notes.

The firm had “very good results coming from a pretty tough patch,” he says.

Meanwhile, Clark says that the e-commerce showdown in China is really with Tencent. He says that while JD.com is also in e-commerce, the firm has a different model than that of Alibaba. When it comes to Baidu, he does not see much competition there as he says it is “quite a different business” to Alibaba. Tencent with its WeChat communication platform pivoting to become a social commerce platform is the competitor here, he says.

Clark adds that he sees electronic commerce through mobile devices in China will not fade anytime soon because shopping in actual stores in the country is not pleasant. This implies that Alibaba Group Holding Ltd (NYSE:BABA) does not need to worry about a decline in mobile as people go back to stores.

Chase Coleman’s Tiger Global Management owned about 5.82 million Alibaba Group Holding Ltd (NYSE:BABA) shares by the end of 2014.

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