Alibaba Group Holding Ltd.’s empire of e-commerce marketplaces and assorted digital services continued its strong growth in the fourth quarter, handily beating Wall Street’s expectations.

The Chinese web giant today reported revenues of 61.9 billion yuan, or $9.9 billion, for the period, a 61 percent jump from a year ago. Analysts had predicted a 53 percent increase. Alibaba’s impressive sales performance is the fruit of an aggressive expansion strategy that’s starting to come at the expense of its bottom line.

The company saw its operating margin shrink 10 percent as it invested in growing key divisions. This effort drove Alibaba’s core e-commerce business to rise an impressive 62 percent in the fourth quarter, to 51.3 billion yuan, or $8.2 billion. Sales from its digital media and entertainment unit, in turn, grew 34 percent to 5.3 billion yuan, or about $840 million.

But the strongest performer by far was Alibaba’s cloud computing business. The division’s revenue jumped a massive 103 percent in fourth quarter to 4.4 billion yuan, or $699 million. In comparison, market leader Amazon Web Services Inc. reported that its sales grew 49 percent during the same period.

Alibaba’s cloud revenue admittedly amounts to only a fraction of the $5.4 billion AWS generated in the fourth quarter. But the company could narrow the gap considerably in the coming years if it keeps up the division’s current pace of growth.

Alibaba is working hard toward that end. The company launched a staggering 316 new products and features for its cloud platform in the fourth quarter, many of which focused on fast-growing areas such as artificial intelligence.

Alibaba is already the leading player in the Chinese infrastructure-as-a-service segment, with International Data Corp. putting its market share at almost 48 percent as of the first half of 2017. That’s compared with nearly 43 percent a year earlier. To sustain the rapid growth of its cloud business, Alibaba is also increasingly looking beyond China to international markets, having most recently added a data center in Indonesia. It currently operates facilities in a total of 18 regions.

“We are seeing significant traction and diversification of customers and revenue, and will continue to invest to further expand the market by developing value-added products and features,” Alibaba said in the earnings report.

The company expects its momentum to continue going forward. Alibaba sees revenue growing a hefty 60 percent this year, or more than 50 percent after excluding recently acquired companies. That’s well ahead of the 37 percent increase analysts were expecting to see in its forecast.

Image: Alibaba Group