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Ma Yun's final report card before retirement: Alibaba's Taiping heyday?

via:投中网     time:2019/8/16 14:48:46     readed:81

Harvesting more than half of the population in underdeveloped areas, how much dividends are there in the sinking market?

Author: Zhen Xiangqing

User growth promotes performance growth. Ali has realized business income of 114.92 billion yuan, an increase of 42% over the previous year, and net profit of 2.252 billion yuan, an increase of 145% over the previous year. Compared with Tencent, Ali's overall net profit is slightly lower than Tencent's, but its revenue is higher than Tencent's revenue of 88.821 billion yuan in the second quarter, and the growth rate is twice that of Tencent.

Whether it's with the e-commerce platformJD.COMCompared with Tencent, the other pole of China's Internet giant, Ali's financial figures reflect that it still maintains a relatively strong growth capacity under a large base.

But it's not entirely comfortable. Compared with Ali in the past, its revenue growth of 42% is the lowest in nearly two years, and as the core business of Ali is the only profitable business, the growth of e-commerce business is also slightly weak, from 58% in the second quarter of 2017 to 44% in the current quarter.

As a giant of Chinese Internet companies, how will Ali dance in the future?

1. Slow growth of e-commerce business

In the current quarter, Ali's core e-commerce business revenue was 99.544 billion yuan, up 44% year-on-year, and the growth rate further slowed down.

Ali's e-commerce revenue comes from two parts, namely commission income (which mainly collects transaction commissions from Tianmao merchants) and customer management income (online advertising), both of which are at a low growth rate. Among them, commission income only increased by 23%, which is the slowest growth in the past two years.

In order to stimulate consumption and growth, Ali began to learn to spell more, to achieve personalized recommendation services for e-commerce.

Pingduo once grew rapidly by pooling and bargaining, but its founder, Huang E, thinks that the model of pingduo is more like headlines. "You can imagine that the exchange of information under the headlines into commodity flow is pingduo." In short, the headline achieves the accurate recommendation of information flow, while Pingduo wants to achieve the accurate matching of commodity flow.

At the end of August last year, Taobao made a major revision, abandoning the home page and insisting on the category recommendation for many years. The information flow section "Guess what you like" was upgraded to the second screen of the home page, in order to achieve a precise match with consumers and increase consumer purchases and advertising revenue.

The revision soon brought results. Jiang Fan, president of Taobao, said publicly that last year Shuang11, the traffic based on Personalized Recommendation had exceeded that brought by search and other means.

"Although the macro environment is not as good as last year, Alibaba has launched many new initiatives, and personalized services help to maintain its growth rate." Bloomberg quoted analysts as commenting.

Not only that, Ali is also looking for new assets to further expand the growth path. Caixin reported on August 15 that Alibaba's purchase of NetEase Koala has been confirmed, the transaction is worth $2 billion, Alibaba will pay in full cash, and the two sides will carry out other forms of cooperation and transactions in the future.

Ali Tianmao International Business and NetEase Koala belong to the first and second rankings of Haitao market respectively. Once the acquisition is achieved, Ali Haitao Business will lose a strong competitor and will occupy the dominant position in Haitao market.

2. Digging the Dividend of the Falling Market

Statistics show that consumption growth in rural areas is significantly faster than that in urban areas. Therefore, the sinking market is still the focus of competition among e-commerce giants, and is another important way for Ali to grow in the future.

In the fiscal quarter, Ali's annual number of active consumers reached 674 million, up 20 million from 654 million as of March 31, 2019. Mobile has 755 million active users per month, an increase of 34 million over March 2019.

More than 70% of them come from underdeveloped areas. At the performance meeting, CEO Zhang Yong said that more than half of the population in underdeveloped areas are already users of Ali.

Over the past two years, when Pingduo rose rapidly from the sinking market, Alibaba's new active buyers in each quarter were lower than Pingduo, but in addition to the second quarter of 2017, they were higher than the growth of Jingdong users.

How to continue to grow in the declining market? "Ali has a series of products with promotional functions, such as cost-effective, daily discounts and so on. These are very effective promotion platforms. Users of third and fourth-tier cities can find these products more easily." Zhang Yong said.

In March this year, Ali announced that it would maximize the integration of cost-effective gathering, day-to-day sale and purchasing, forming a new sales platform of Tao Department to divide up the sinking market.

The reunion plan was launched in 2009 with the rise of group buying, but with the loneliness of group buying later, the reunion plan was merged into Tianmao at the end of 2016. Now, with the rise of Pingduo in the declining market, the centralized budget is once again raised to a strategic position, becoming an important weapon against Pingduo.

3. The Future of Cloud Business Relations

Among Ali's businesses, cloud computing has the fastest growth rate, but it has been declining year-on-year for six consecutive quarters - an increase of 66% to 7.787 billion yuan, accounting for 6.78% of Ali's overall revenue.

In the domestic market,AliyunComputing occupies a leading position. According to IDG data, Alibaba's cloud business accounted for 42.7% of China's public cloud computing market in the second half of 2018, while Tencent's cloud business accounted for only 11.8%.

But in the global market, Ali has more competitors and is very strong. According to Gartner, the research and analysis organization, at the IaaS level, AWS accounted for 47.8% of the total in 2018, ranking first, and Aliyun 7.7%, ranking third. Others areMicrosoftInternet giants such as Google and IBM.

At the performance meeting, Alibaba said that at present, more than half of China's A-share listed companies and 80% of China's science and technology enterprises use Alibaba.Cloud services

In fact, cloud business is not only about enterprise services, its technology can also make Ali know more about businesses and users, so as to better profit from it. As Ali said at the performance meeting, "Ali's performance is not only from user growth, partly because of improved algorithms to better connect buyers and sellers."

Last November, after Ali announced that Zhang Yong would take over the chairmanship of Ma Yun's board of directors, Zhang Yong said in an interview with CNBC that cloud computing would become Ali's main business in the future, and firmly believed that "every business in the future will be supported by cloud computing."

At present, Aliyun is still in the loss stage. The adjusted tax and interest depreciation and amortization loss was 358 million yuan, twice the loss in the previous quarter.

Nevertheless, foreign media once said, "At present, Alibaba's cloud computing services are still in the investment stage, and have not started to make profits. As their cloud computing services continue to expand, they are expected to become an important source of profits for the company, just like AWS for Amazon.

In September this year, Zhang Yong will officially replace Ma Yun as chairman, and Alibaba will usher in the post-Ma Yun era.

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