Chinese e-commerce giant Alibaba Group Holding said it expects to nearly double its transaction volumes by 2020, even as it signalled its intention of shifting away from that measurement as it faces an investigation into its accounting.
At an investor conference at its headquarters in Hangzhou, China, Alibaba said it expects to record 6tn yuan ($912bn) in gross merchandise volume (GMV) in fiscal 2020, nearly double 3.09tn yuan in fiscal 2016.
From now on it would report GMV only on an annual basis, rather than quarterly, chief financial officer Maggie Wu said.
Alibaba’s astronomical GMV – the value of goods sold on its platforms – has wowed some observers and raised suspicion among others because of the way it is calculated.
By comparison, China’s total retail sales of consumer goods in 2015 was 30.1tn yuan, according to government statistics.
“GMV is still a very important metric,” Wu said. But earlier, executive chairman Jack Ma noted that it was not “the only metric”.
Last month, Alibaba announced that the US Securities and Exchange Commission (SEC) had launched a probe into its accounting practices to determine whether they violated federal laws. Questions about Alibaba’s growth rate and its relations with affiliated companies have dogged the firm for years. Mentioning the investigation, Wu said the company wanted to be cooperative and transparent. One of the issues the SEC is probing is the accounting for Cainiao, a logistics data company that is around 47%-owned by Alibaba and run by Judy Tong, an Alibaba partner.
Cainiao, started jointly in 2013 by Alibaba, Yintai Holdings, Fosun Group, Forchn Holdings and five major delivery companies, has in the past been unconsolidated in Alibaba’s financial statements, raising questions among some investors and analysts. Wu said it was not up to Alibaba to decide whether or not to consolidate Cainiao, but rather was a matter of complying with GAAP accounting rules.
Ma said Alibaba expects to have 2bn consumers on its books by 2036, up from 423mn active buyers in 2016.
Addressing concerns about the company’s efforts to remove counterfeit items from its online platforms, Ma said Alibaba will do “anything to stop the fake products”. The company has been dogged for years by accusations that its shopping platforms were conduits for counterfeiters. “I promise you guys that counterfeits, fake products, and intellectual property theft – we are more and more confident than ever that we can solve the problem,” Ma said.