For the first time, Alibaba Group Holding Ltd (NYSE: BABA) announced full year revenue guidance estimate of a 48% increase for the fiscal year ending in March. The Chinese e-commerce giant is trying to relieve investors’ concerns about their growth prospects.
Moreover, Alibaba expects to nearly double its transaction volumes by 2020, even as it signaled its intention of shifting away from that measurement as it faces an investigation of its accounting. During an investor conference at its headquarters in Hangzhou, China, the company said it expects to record 6 trillion yuan in gross merchandise volume in fiscal 2020, approximately double 3.09 trillion yuan in fiscal 2016.
Alibaba’s decision to announced a revenue guidance follows the company is grappling with lingering questions about its business outlook amid China’s economic slowdown and intensifying competition from rivals such as JD.Com Inc. (ADR) (NASDAQ: JD).
In addition, Alibaba said last month that the United States Securities and Exchange Commission was investigating the way the company accounted for the sales data from Singles Day, an unofficial online shopping holiday in China. Officials are also investigating how the company accounts for a logistics initiative called Cainiao. Alibaba has said that it is cooperating and that new disclosures would help SEC answer its questions.
Alibaba has made a series of acquisitions that have allowed it to expand its platform beyond online shopping. In November, the company bought Youku Tudou Inc. (ADR) (NYSE: YOKU), a major Chinese online video provider. In April, Alibaba and its financial affiliate together invested $1.25 billion in Chinese mobile food delivery app Ele.me. Outside China, Alibaba in April bought a controlling stake in Singapore e-commerce startup Lazada Group for about $1 billion.
Alibaba Vice Chairman Joe Tsai said Tuesday that the company will continue to use its excess cash to make new acquisitions and to buy back its shares. The company has no plans to pay dividends for now, he said.
Mr. Tsai said that Alibaba’s acquisitions are “always done with strategic thinking in mind” and that those deals are meant to add value to Alibaba not necessarily in the near future but in the long run, sometimes even in 10 years.