Retail Business Is Cold. People Are Curious About Alibaba's New Growth Point.

The US stock market season is drawing to a close. In the cold environment of global retail industry, China retail giant Alibaba group released its first quarter fiscal year 2020 in the evening of August 15th.

As of the first quarter of June 30, 2019, the total revenue of Alibaba group was 114 billion 924 million yuan (US $16 billion 700 million), up 42% over the same period last year. With the help of the "6.18" promotion in the middle of this year, the total revenue of the Alibaba group was higher than the 111 billion 734 million yuan expected by the market. The net income of the common stock in the eastern region was 21 billion 300 million yuan (about 3 billion 100 million US dollars); the adjusted pre tax profit increased 34% to 39 billion 200 million yuan (about 5 billion 700 million dollars) over the same period last year. In the pre trading, the company's share price rose nearly 3%.

"Although the macro environment is not as good as it was last year, Alibaba has launched many new initiatives, and the adjusted supply of personalized products has maintained growth rate," said Steven Zhu, analyst at Pacific Epoch. "Taobao's live broadcast of the group and its cooperation with international brands also play a role."

As the mid year growth point of Tmall's "6.18", Tmall has 120 brands traded over 100 million brands during the event, and this year's first participation in Tmall's "6.18" overseas brand reached 870, which is two times the same period last year, and the highest turnover exceeded 100 times. This is why Tmall has been working hard to speed up the entry of overseas brands. The brand is also looking forward to such a growth home.

French fashion house Chanel Chanel Beauty, the most profitable sector, entered Tmall in the first quarter, and luxury brands such as Alexander McQueen and Coach were also coveted by Alibaba.

This quarter, Alibaba is still pushing ahead with Tmall's new product strategy and increasing the number and speed of overseas brands. The number of new brands entering the market in the first half of this year increased by 294%. Tmall International said it will continue to increase investment and introduce more than 40000 global brands in the next 3 years to double the number of brands.

Moreover, Alibaba has launched the Tmall international global investment website (merchant.tmall.hk) and the brand self access portal (openshop.tmall.hk), hoping that these two platforms will enable overseas brands to learn more about Tmall's international mode. Alibaba said that an overseas brand's entry into Tmall was officially opened from the click of the application to the store line, and it could be completed in 7 days.

New changes have also taken place in active users this quarter. Alibaba, including Tmall and Taobao, has achieved 755 million monthly active users in China's retail platform, an increase of 56 million in six months. The number of active users in the Chinese market has reached 674 million. The surprise is that more than 70% of new users come from less developed areas.

As Alibaba CEO Zhang Yong prepares to take over as the chairman of the September billionaire founder Ma Yun, Alibaba is also at a critical juncture. The Sino US trade war is aggravating China's uncertainty in the world's second largest economies, and the rise of many domestic competitors is also testing its long standing dominance in China's online retail industry.

The e-commerce giant may be looking for asset acquisitions to consolidate its leadership. In August 13th, according to "LatePost", Alibaba is negotiating the acquisition of NetEase koala. The outcome of the negotiations is basically determined, and the purchase price may be several billion dollars. Details remain to be discussed. After the completion of the acquisition, NetEase koala or Tmall international will do business integration and cooperation. At the beginning of this year, NetEase koala began to seek opportunities for sale and investment in the market, and Alibaba and many other e-commerce platforms had approached them.

This is also one of the reasons why Alibaba plans to raise more capital to IPO in the first quarter, which reflects the ambition of the group to achieve this goal. The IPO is probably the largest stock offering ever since 2010 in Hongkong. According to Bloomberg reports, the company has submitted the listing application secretly, but given the massive protests in Hongkong in the past 11 weeks, it is unclear the specific time of IPO.

Analysts are also optimistic about the Alibaba's next performance. Bernstein David analyst David Dai said in a report before the earnings release: "we expect Alibaba users and transaction growth to accelerate in the second quarter."