Alibaba's Joseph Tsai Explains Affected Revenues

Shares of Alibaba Group Holding Ltd BABA took a major beating on Thursday following the company's declaring worse-than-expected quarterly numbers. Joseph Tsai, Alibaba executive vice chairman, was on CNBC to discuss the company’s outlook on growth as the company seeks to increase its mobile user base.

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Transition To Mobile

“There’s always two sides of the coin to mobile,” Tsai said.

“We are very excited about this quarter’s numbers in terms of mobile GMV and the active users. Just taking a step back, we had 49 percent year-on-year growth in GMV and we added, that added, 27 million active buyers – taking our active buyer base to 334 million. Now, looking at mobile, looking at December [2014], we had 265 million monthly active users on mobile.”

So, What's The Flip Side?

He continued, “So, now about 42 percent of our total GMV is coming from mobile. We are very excited about that, especially in light of the fact that in the last three months we added 48 million monthly active users on our mobile apps and these are the users that are coming in day in and day out to purchase things on a mobile device.”

“In that transition, we have covered that issue on the call; our mobile monetization rate is lower than our monetization rate on the desktop computer and that’s why they have affected revenue.”

Will Mobile Monetization Rates Zoom To Play Catch-Up With PCs?

“We take the long view in this transition to mobile because the first thing that we focus on is user growth and user engagement,” Tsai explained.

“So, as long as we see robust growth of monthly active users, we think that monetization over time will take its course because on mobile you can provide more targeted ads to users. So in the long run, we see that mobile monetization is going to trend up,” Tsai said.