Alibaba Group Holding Ltd.’s revenue rose a better-than-expected 38 per cent after a record Singles’ Day haul, though it now faces the uncertainty from the coronavirus epidemic that has killed more than 1,300 in China.

Revenue surged 38 per cent to 161.5 billion yuan (US$23.1 billion) in the December quarter, versus projections for 159.5 billion yuan. The company reported a surprise 58-per-cent rise in net income to 52.3 billion yuan.

Alibaba — the first major Chinese technology corporation to report results since the novel coronavirus emerged in January — barely mentioned the outbreak in its earnings report. Instead, it highlighted its biggest Singles’ Day ever, bagging US$38 billion of business during the annual shopping bonanza.

China’s most valuable corporation has struggled to sustain growth during an economic slowdown in its home market, and is now grappling also with the uncertainty of the coronavirus outbreak. While widespread home confinement is spurring demand for online services from grocery delivery to office apps to streaming entertainment, the disease is snarling nationwide transport and threatens in the long run to dent the consumer spending Alibaba depends on.

“There’s certainly some short-term challenges as the merchants and delivery networks are all bottlenecked,” Hong Kong-based Bernstein analyst David Dai said before the earnings were released. “But in the mid to long term, people are getting more used to shopping online. Grocery, the most difficult-to-penetrate segment, is also moving online because of this.”

This week, the company declared a waiver of some service fees for merchants on its main direct-to-consumer Tmall platform to help those struggling with the fallout from the outbreak. That may further depress the top-line in 2020.

What Bloomberg Intelligence Says

Alibaba’s decision to waive platform service fees in the first half of the year, to support Tmall merchants, not only dampens revenue, but also signals that online retail may not be immune to China’s coronavirus outbreak. This increases the possibility of downbeat guidance for the March and June quarters in the company’s earnings report on Thursday. —Vey-Sern Ling, analyst

Alibaba has shed 1.4 per cent of its value since a broader Chinese selloff began in January, underperforming arch-rival Tencent Holdings Ltd., which as a mobile gaming and social media operator is better shielded in the short run from the epidemic.