Alibaba.com Reports $220 Million Profit in 2010

Congrats, 2010 was a great year for the world’s largest B2B trading platform, Alibaba.com.

Alibaba.com generated a whopping US$845 million revenue last year, a 43 percent increase from 2009. Profit margin was high at 26 percent, representing over US$220 million in net income.

One of the key reasons that triggered strong revenue growth was Alibaba.com’s fast growing user base in the last one year. The number of paying members crossed the 1 million mark in 2010. Alibaba.com had over 800,000 paying members on both the international and China market places. The rest were from HiChina, a web domain and solutions company under Alibaba.com. This year’s profit added a pile of cash to Alibaba.com’s treasure trove. Cash balance was at $1.45 billion as of December 31, 2010.

“2010, the ‘Year of Customer Service,’ was an important year for Alibaba.com. It was the year when the company hit the 1 million paying member milestone; the year when we completed the most acquisitions domestically and internationally; and the year when we increased endeavors to maintain a trustworthy e-commerce platform and refocused on creating value for our customers,” said Jonathan Lu, CEO and Executive Director of Alibaba.com.

“This strong financial performance achieved despite the slow progress of the global economic recovery and the company’s aggressive action against fraud late in the year, along with the successful upgrade of our business model, are strong evidence of the company’s intent to serve customers better while maintaining balanced financials.”

Future Plans

In 2011, Alibaba.com plans to focus on servicing its existing paying members rather than member acquisition. The focus will be primarily on its Gold Supplier and China TrustPass members through service upgrades. China TrustPass is a platform for both corporate and individual users to connect with buyers. Users need to pass an authentication and verification process before they can become a China TrustPass member.

The service upgrades include features that ease business processes on Alibaba.com and also a collaboration with Taobao.com, China’s largest online shopping platform (B2C) with over 370 million users. The Alibaba Group also owns Taobao.com.

“We will also strengthen the collaboration with Taobao, for instance, our third online transaction-based platform, Wu Ming Liang Pin (lp.taobao.com) (white-label mall). This new transaction-based platform is designed to give our quality, wholesale paying members direct access to Taobao, China‟s largest online shopping platform, helping them benefit from its 370 million users and its tremendous market potential. We are a company that focuses on creating long-term value for customers. We will keep offering online tools that help them not only do business more easily, but also manage their businesses more easily,” Lu added.