, Columnist
Alibaba Uses Its Shopping Leverage
Widening e-commerce margins are underwriting Ma's entertainment push.
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Operating leverage.
Get used to hearing those words a lot when you examine earnings at Alibaba Group Holding Ltd. The term pops up six times in the company's June quarter press release and helps explain how the Chinese e-commerce provider managed to post income growth that surpassed the pace of revenue expansion.
Across all line items -- product development, sales and marketing, general and admin, and share-based compensation -- Alibaba trimmed costs as a proportion of revenue. This shows the incredible economies of scale Jack Ma has built at the company, including his success in moving to mobile to extract more from consumers.