Alibaba Group Holding Ltd’s strong rebound in both revenue and profit last quarter are impressive. Sales climbed 34% and operating income jumped 42% after paltry results the quarter before. But investors should be aware just where those numbers are coming from before they celebrate a recovery.
While primarily an e-commerce company – accounting for half of revenue last financial year – the single-biggest contributor to growth in the June period was what the Chinese company calls "new retail”. In the backward world of online sales, this actually refers to brick-and-mortar businesses such as supermarkets. That category, lumped together as "others”, climbed 88% from a year prior.
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