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Compared with other Internet giants, Alibaba is perhaps the most reflective thermometer for the Chinese market.
On Friday, May 22, Alibaba Group (BABA.US) released the full-year fiscal year 2020 and fourth quarter (January-March 2020) financial reports before the US stock market.The financial report shows that Alibaba’s revenue for the quarter was 114.31 billion yuan, a year-on-year increase of 22%, which was higher than market expectations of 107.038 billion yuan.
Segmented by revenue segment, the core e-commerce segment, which includes Amoy e-commerce and new retail business, maintained 21% year-on-year revenue, which was mainly due to the rapid growth of low-margin self-operated businesses such as Hema, while the high-marginThe combined revenue of customer management (up 3%) and commission (down 2%) brought by Taobao Tmall increased by only 1% year-on-year.The same decline in commissions is also the income of local life services where Hungry is located, which is 8% lower than the same period last year.
Alibaba Cloud and innovation business have maintained their growth rate.Alibaba Cloud’s revenue in fiscal year 2020 exceeded 40 billion yuan, an increase of 62%, and quarterly revenue reached 12.2 billion yuan, an increase of 58%.According to Morgan Stanley, Alibaba Cloud ’s valuation has reached $ 77 billion.
But in the first quarter of the industry’s popular digital media and entertainment business sector, Ali did not seem to benefit from the epidemic.The financial report shows that the revenue of Ali big entertainment business including Youku has only increased by 5%, not even as good as last quarter.
In any case, after Ali went public in 2014, core e-commerce has experienced recession or stagnation as never before.Compared with Pinduoduo and JD.com, Alibaba’s performance is also closest to the actual situation in which China’s GDP fell by 6.8% in the first quarter.
Affected by the previous Hong Kong stocks, the Chinese stocks of US stocks also suffered a general decline on Friday. Alibaba’s stock price closed down 5.87%. There has been basically no increase or decrease since the beginning of the year.It is worth noting that Pinduoduo and Ali released financial reports at the same time this quarter. Although 44% revenue growth was a record low for the listing, it still far exceeded the consensus expectations of Bloomberg analysts, plus the annual active purchase of core user indicators.Home broke through 600 million, and Pinduoduo’s stock price rose 14.5% against the market, and the year-to-date increase has reached 81.65%.From Ali’s perspective, the capital market is not too face-saving.
Based on the market value closed on Friday, Alibaba is now only equivalent to more than 6.5.
Anti-risk category
Alibaba ’s financial report shows that in the past fiscal year 2020 (April 2019-March 2020), the consumer business GMV of Alibaba ’s digital economy reached RMB 7.053 trillion, surpassing $ 1 trillion, Of which GMV in the Chinese retail market reached RMB 6.589 trillion.
The creation of a single company ’s $ 1 trillion in transaction volume is indeed a milestone, which Ali calls “because I believe, so I see”, because in 2015, Alibaba announced that it will become the world ’s first platform to be sold in 5 years.1 trillion dollar company.
Regardless of the romantic rhetoric inside, the $ 1 trillion GMV was originally a result of a business model that proved to be sustainable. This is not a precise prediction, but an actuarial conclusion.
What we can directly see is that despite the stagnation of revenue growth in the Chinese retail market except for new retail, the actual GMV paid by Tmall still has a year-on-year growth of 10%.He Pindo is not too inferior.And for Tmall merchants, the pressure to rent the platform is also relatively reduced this quarter, because Ali did not choose to realize too much for the 10% GMV growth.During the outbreak, Ali chose to release water to raise fish.
However, Tmall is still one of the platforms most affected by the epidemic.In terms of logistics fulfillment, compared with JD.com ’s own logistics system, the epidemic situation and the government orders of various local governments have caused the social logistics that Ali relies on to undergo a period of suspension, and even once Taobao Tmall had to find ways to pressure the merchantsGoods to reduce the damage already caused to the user experience.
In addition, Ali also suffered a loss in the category during the epidemic.Taobao Tmall’s traditional superior categories are clothing and beauty. Ali has firmly controlled these two high-margin categories in its own hands in the past years, and consumers have already formed a cognition.However, the epidemic prevented Chinese consumers from going out, and even when going out, they paid more attention to protection rather than fashion, which also greatly reduced the consumption of clothing and fashion.
“Because women don’t need to wear makeup when wearing masks,” Zhang Yong, chairman of Alibaba Group, explained on the analyst’s call after the financial report.In addition, subject to the impact of the epidemic in the first quarter on transportation and manpower, the income of local life services where Hungry is located fell by 8% year-on-year.
However, Zhang Yong said that the sales growth of FMCG on Tmall reached 40% this quarter, and the consumption of fresh food also increased sharply.This is consistent with the data from the first quarter of other platforms. Jingdong’s financial report shows that in the first quarter, the net income of Jingdong’s daily merchandise sales increased by 38.2% year-on-year.
In terms of these necessities with negligible profit margins, Ali has no advantage. Since 2015, investment in new retail businesses such as Hema has made Ali slowly occupy a place.It is understandable that the Internet platform business is prone to high-growth, and the investment of one dollar may have a return of ten dollars.For the traditional retail industry, it is already good to invest a dollar to make a profit while protecting the capital.
But it is undeniable that these categories of necessities are more risk-resistant and still maintain a stable consumer demand in the economic downturn. This outbreak will make the Group pay more attention to the investment and construction of Tmall FMCG and new retail business.According to a previous “LatePost” report, the Tmall supermarket business group was upgraded to the same city retail business group in mid-April. Ali insiders said that the current city retail business group has risen to one of Zhang Yong’s key projects.
Ali said that in April Tmall physical GMV had a “strong recovery”, while May “continued to grow”.
Ali needs new users
Although Ali reached his goal on schedule, the recovery of JD.com and the rise of Pinduoduo are already unstoppable facts.
The first is that the annual active buyer growth of Ali’s core e-commerce is slowing down.This financial report shows that in the 12 months ended March 31, 2020, Alibaba ’s annual active consumers reached 726 million, an increase of 72 million from the 12 months ended March 31, 2019, but compared to the previous quarter ’s711 million increased only 15 million.
In vertical comparison, since Jiang Fan became the president of Taobao at the end of 2017 (and then successively took over as the president of Tmall and the president of Alimama to take over the core e-commerce business), Alibaba ’s China retail market is active annually in fiscal year 2019 (April 2018-March 2019)Consumers grew by 102 million, and by 72 million in fiscal year 2020, which has slowed particularly since the last two or three quarters.Although Zhang Yong said that 70% of new users come from underdeveloped areas, since 2015, Ali’s user growth seems to have entered a bottleneck period.
From a horizontal perspective, since 2019, active buyers of JD.com have resumed growth, and this quarter has increased by 25 million, with a trend of speeding up. Since Pinduoduo has disclosed financial data since its listing, the growth of user data has been very impressive.Surprised that despite the decrease in this quarter, it still maintained a growth of 43 million annual quarterly active buyers. There are still many new users who are curious about Pinduoduo to download and place orders to use this integrated platform e-commerce born in the era of mobile Internet.
Today, Pinduoduo’s annual active buyers have reached 628 million, and the gap with Ali’s domestic e-commerce business of 726 million has narrowed to less than 100 million.If this trend does not change, in the next four quarters, Pinduoduo’s annual live buyer data is likely to surpass Ali.With the help of the rise of WeChat, China’s first app, the ceiling of its user dimension may also be WeChat.
However, according to the GMV and the number of active buyers, Ali’s average annual annual expenditure of active buyers still reached a high of 9714.9 yuan, while Pinduoduo was only 1842.7 yuan.Ali still has a big advantage in customer unit price, repurchase rate and user’s mind.
It is worth mentioning that the current hottest e-commerce brought goods live broadcast, Zhang Yong made a positive analysis in this financial report.
“Live broadcasting is essentially a sales method, and talents and celebrities play the role of salesmen and earn commissions.”
When peers regard e-commerce live streaming as an emerging business directly, Ali’s attitude seems to be much more cautious than expected, although Taobao Live has cultivated two super leading cargoes, Li Jiaqi and Weiya, in the past two years.Anchor, and swept the wave of live streaming.
Zhang Yong said that from the point of view of the merchant, the choice of live streaming is only a substitute for the channel cost and promotion cost in the past, but more importantly, it is necessary to precipitate users in this way and do longer-term user operations.
36 Krypton also found in previous industry surveys that even if some head-bearing anchors do a live broadcast, most of the transactions brought to merchants are not directly realized in the anchor live broadcast room, but a large number are through scattered micro-commerce channels.Shipping.Unless the anchors with goods can get the absolute lowest price from brands and merchants for a certain period of time, the anchors with such bargaining power are few in the whole network.This means that there may not be a direct relationship between live streaming with the platform and platform revenue. For e-commerce platforms to benefit from live streaming, other complicated links are needed to achieve.
“We don’t take live broadcast as an independent business form and sales form, we see it as part of the overall consumer operation, and ultimately help merchants achieve long-term value realization.” Zhang Yong explained.Therefore, some companies pin their hopes on user growth and revenue growth on live broadcasting. From Ali’s experience and perspective, this may not be the best option.

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