The Cayman Islands-based holding firm Alibaba Group Holding Ltd. (BABA) operates its e-commerce operations through its Chinese subsidiaries and variable interest corporations (VIEs). Its main line of business is to provide a digital marketplace where buyers and sellers can connect and transact. Cloud computing, digital media, and entertainment, as well as other corporate products, have been added to the company's portfolio, nevertheless. Alibaba operates its business through seven key sectors, with its massive e-commerce operations at the forefront.
Its main rivals include other well-known Chinese e-commerce and Internet businesses, such Tencent Holdings Ltd. (0700), as well as international and local e-commerce businesses, like Amazon.com Inc. (AMZN). Alibaba competes with enterprises specializing in those categories as well since it operates in the cloud computing, digital media, and digital entertainment industries.
Alibaba released its financial figures for the third quarter of its fiscal year (FY) 2022, which concluded on December 31, 2021, in late February. To $3.2 billion, net income attributable to common shareholders decreased by 74.3% year over year (YOY). Contrarily, revenue increased 9.7% YoY to $38.1 billion. The company's overall expenditures and expenses increased 36.9% YOY, far more quickly than its revenue, which had an adverse effect on net income. Adjusted EBITA, the profit indicator that Alibaba employs for each of its business divisions, decreased by 26.8% year over year to $7.0 billion.
The business emphasized the rise in its yearly active worldwide users, who reached almost 1.3 billion, in its quarterly financial report. Alibaba also disclosed that a $3.9 billion goodwill impairment relating to its digital media and entertainment division, as well as declines in net profits resulting from changes in the fair value of its equity assets, had a negative impact on its financial performance.
The sector also comprises 1688.com, its wholesale website.
In Q3 FY 2022, the China commerce division recorded sales of $27.0 billion, an increase of 6.8% from the same period in the previous year. Adjusted EBITA decreased 19.7% year over year to $9.1 billion. Virtually 71% of the business's overall revenue and nearly all of its adjusted EBITA come from this division.
The majority of Alibaba's foreign retail and wholesale companies, including Lazada, AliExpress, Trendyol, Daraz, and Alibaba.com, are included in the company's international commerce section.
In Q3 FY 2022, revenue for the foreign commerce division increased 18.2% year over year to $2.6 billion. The segment's adjusted EBITA was -$458 million, more than double the adjusted loss from the same period last year. About 7% of the company's total revenue comes from this division.
Local consumer services had a $1.9 billion revenue in Q3 FY 2022, an increase of 27.3% year over year. In comparison to the adjusted loss from the same quarter last year, adjusted EBITA was -$783 million, a loss that increased by 15.3%. About 5% of Alibaba's overall revenue is attributable to this area.
Youku, a long-form video platform that enables users to search, view, and share video content across numerous platforms, is part of Alibaba's digital media and entertainment division.
In Q3 FY 2022, revenue for the digital media and entertainment division increased 0.4% year over year to $1.3 billion. It reported adjusted EBITA of -$216 million, narrowing its adjusted EBITA deficit from the same period last year. More than 3% of Alibaba's overall revenue comes from this category.