Bloomberg News

Alibaba Third-Quarter Net Income Gains After Price Increase

November 30, 2011

Nov. 25 (Bloomberg) -- Ltd., a unit of China’s biggest e-commerce company, said third-quarter profit rose 12 percent, matching estimates, after raising prices.

Net income increased to 410 million yuan ($64 million) from 366.1 million yuan a year earlier, said in a statement yesterday. This matched the 410.1 million yuan average of eight analysts’ estimates compiled by Bloomberg. Revenue rose 11 percent to 1.6 billion yuan.

Chinese exporters are paying 50 percent more this year to set up new online storefronts to market their products, after the Hangzhou, China-based company raised prices to sustain revenue growth. Chief Executive Officer Jonathan Lu is boosting efforts to protect buyers, after the company said in February that some were defrauded by bogus vendors.

“Average spending per customer is increasing,” Qiu Lin, who rates Alibaba shares “buy” at Guosen Securities in Hong Kong, said before the earnings. “The company is selling more value-added services, and the price increase at the start of the year also helped boost revenue.”, a unit of Alibaba Group Holding Ltd., rose 2 percent to HK$8.88 in Hong Kong trading yesterday, before the announcement. The stock has declined 36 percent this year, underperforming Chinese Internet rivals including Tencent Holdings Ltd. and Baidu Inc.

In January, Alibaba started selling its “Gold Supplier” memberships for Chinese exporters at 29,800 yuan, and stopped selling a package that was priced at 19,800 yuan.

--Editors: Anand Krishnamoorthy, Joshua Fellman

To contact the reporter on this story: Mark Lee in Hong Kong at

To contact the editor responsible for this story: Michael Tighe at

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