Alibaba Released The Third Quarter Of Fiscal Year 2021

Alibaba released its third quarter financial report for fy2021

1. The number of active consumers increased by 22 million in a single season, and the annual Gmv of Taobao live broadcast exceeded 400 billion yuan. Taobao's revision has an effective effect by adding content and experience;

2. Alibaba cloud's business has been adjusted to become a regular EBITA, and the rookie network has achieved positive cash flow, and the crawler strategy has achieved initial results;

3. Spring Gaoxin retail started financial consolidation in this quarter. The new retail and cloud businesses will become Ali's new growth engine in the next five years.

On the evening of February 2, Alibaba released the third quarter financial report of fiscal year 2021 (Note: Alibaba's fiscal year is not synchronized with the natural year, starting from April 1 of each year and ending on March 31 of the following year).

In the quarter ending December 31, 2020, Alibaba's revenue was 221.08 billion yuan, up 37% year-on-year; from the perspective of profitability, non-general accounting standards accounted for 59.207 billion yuan, a year-on-year increase of 27%.

Several key indicators of financial data have exceeded market expectations, but the growth rate of tmall's physical Gmv (platform transaction volume) has slowed down. When more and more challengers attack it, from Jingdong, pinduoduo, to shuoyin express, from traditional e-commerce to live e-commerce, all fields are facing challenges. Whether the growth momentum of Taoxi e-commerce can be maintained remains to be seen in the next few quarters.

To fully observe an enterprise, we need to look at it from a multi-dimensional perspective. Zhang Yong, chairman and CEO of Alibaba's board of directors, highlighted the word "social responsibility" in a telephone conference after the financial report. To create jobs, serve small and medium-sized enterprises, and transform the production end, we should bear more social responsibilities like business. "Ali used to be like this, and will be so in the future."

Through different aspects of the financial report, we can see what Alibaba did and how it performed in the past quarter.

E-commerce business no longer singles

Ali financial report divides the overall business into four business sections: core e-commerce, cloud computing, digital entertainment and innovation and other businesses.

In terms of revenue proportion, "core e-commerce" including Taobao / tmall continues to play the role of engine.

"Core e-commerce" is a large business category, including 2C online / offline retail, 2b wholesale, o2o, logistics, etc. Looking at Alibaba's revenue in recent years in the financial report, we can find that the core e-commerce accounts for more than 80% of the total revenue, contributing most of the operation, especially Taobao, tmall, juhuasuan, etc.

This quarter, the traditional two revenue pillars: customer management, advertising revenue and commission, accounted for 46% of total revenue.

The 2B business such as 1688 and Ali international station has maintained double-digit growth. The net income of rookie network was 11.36 billion yuan, with a year-on-year increase of 51%, and the cash flow from operation was realized. These main incomes support Ali's steady growth.

However, the growth rate of new retail business (the "other" revenue under the core e-commerce category) has exceeded that of Taobao / tmall.

Judging the growth of a business depends on these factors: 1. Growth rate; 2. Importance.

Ali's new retail business income includes Gaoxin retail, tmall supermarket, HEMA, tmall import direct marketing, koala, etc. This part of the revenue was 51.76 billion, with a year-on-year increase of 101%, accounting for 23% of the total revenue, which became the growth responsibility of this period.

In a telephone conference after the financial report, Wu Wei, the CFO of Ali, said that even if the part of Gaoxin retail which was consolidated in this quarter was removed, the new retail business also increased by 40%, and the total revenue growth rate was 27%.

Ali is no longer an e-commerce company. It has established a new business line through self-management, acquisition and merger. The holding company Gaoxin retail started to consolidate its financial statements this quarter. A little earlier, RT Mart changed its command and alilin Xiaohai took over the post of CEO. It is expected to solve the obstacles of RT Mart supermarket integrating with other business of the group, and further strengthen the cooperation with tmall and taoxianda.

On January 31, Gaoxin retail just announced its performance in 2020. Last year, 24 small run hair companies were opened, 20 in Nantong and 4 in Taizhou. "E-commerce online" once observed in the report "RT mart's accelerating" becoming smaller ", what's the imagination of sinking box horse? Whether RT mart, HEMA or Yonghui, China's retail stores have opened small and medium-sized supermarkets, with small businesses of about 500 square meters entering the community and sinking into the market, reaching more people.

As of December, HEMA has opened 246 stores. The number of daily paid members has increased by nearly 30% over the same period of the same period last year. From food delivery to fruit and vegetable delivery and daily necessities, the number of categories has increased.

Local retail + local life service + Fresh e-commerce constitute our "economy around us", which is a bigger market than online shopping. Ali has been cultivating a new retail ecology since 2015, and has invested a lot. It is not difficult to see that the recent layout is from the passive and defensive strategy in the past to the active offensive development. Once the business barriers between them are broken, efficiency is increased and this high-frequency market is occupied, Ali will be able to resist artillery fire from different directions (Jingdong, pinduoduo and meituan are all making efforts in community group buying recently).

Has the problem been solved

User growth is one of the most concerned indicators of the capital market for e-commerce platforms.

As of December 31, the annual AAC of Alibaba's retail market in China reached 779 million. In this quarter, the annual net increase of active consumers was 22 million, which was the performance of the last eight quarters.

Since the beginning of 2019, the sinking market has become an important source of Ali's user growth, contributing 60% to 70% growth almost every quarter. The performance of Taobao's special price version has been carried out separately. It has been online for less than a year, and has achieved hundreds of millions of Mau (mobile monthly jobs).

Taobao focuses on rich, tmall is the main position of the brand, Taobao special edition focuses on factory goods up. It can be seen that Alibaba carries out classification management for different customer groups and introduces diversified commodity supply to meet different users.

However, in terms of the total number of users, Jingdong has been actively buying 441 million users annually and 731 million active buyers for many years, all of which are catching up with ALI.

In terms of the Mau index of mobile phone users, Mau reached 902 million at the end of December, an increase of 21 million in a single quarter. It is close to the 940 million Internet users in China. When the growth is no longer the target, the next focus will be on the user's usage time and consumption depth.

Some of the businesses interviewed by e-commerce online are trying to make content-based, learning how to shoot videos.

Today's e-commerce has changed greatly, especially on the flow side. The upstream traffic may be content platform, instant messaging tool, or community platform. They lock in users in various forms. As a result, today's e-commerce has a new topic - how to introduce users from these upstream flow pools, such as shuoyin, Kuaishou, wechat, microblog, and station B, and make transactions on the platform of their choice.

Zhang Yong believes that with the increase of Internet users' products, businesses' multi platform operation has become the norm. The differentiated value of Taoxi platform is to provide a complete set of business tools, not a solution.

In the past, what Taoxi platform has been doing: constantly updating and upgrading, increasing product information flow, and adding content center "browsing".

How much value will a new entrance produce? You can see from the live broadcast that Taobao live, fast hand and tremolo are all 100 billion Gmv, and fast hand and tremor are directly promoted to e-commerce companies.

This quarter, Taobao home page recommended page traffic increased by 90% year-on-year. The annual Gmv of Taobao is more than RMB400 billion.

Taobao is becoming rich media, from the initial shopping mall, gradually grow into a new place to focus on the content. From this point of view, Taobao's "shopping" and Zhang Xiaolong's "video Number" in the wechat open class are both intended to accelerate the flow cycle in the app.

Each goal may not necessarily lead to new users, but can retain existing users and promote consumption. If users stay on the platform for a long time, they can realize shopping / buying - attracting merchants to open stores - pushing new products / new brands - satisfying diversified needs - and more users will shop / buy on the platform, forming a flywheel effect.

At the recent Spring Festival Party of merchants, tmall released its new strategy this year. "E-commerce online" combed three key points in the new strategy of tmall:

Improve the consumer experience;

Reduce operating costs, optimize products (flagship stores, data products), and improve the overall operation efficiency;

Promote new products, new brands and new categories.

It doesn't support "one out of two", simplifies the marketing method, makes the commodity price more direct, the logistics experience more deterministic, and the promotion of experience becomes the top priority. Taoxi e-commerce wants to become "simple"

Ali's new momentum

After entering 2021, all the big companies will return to the same proposition: how to keep the current growth rate and how to obtain new increment.

The future investment is directly related to the future growth of an enterprise. Zhang Yong, chairman of the board of directors and CEO of Ali, said that it would take 8 to 10 years to incubate new business. Ali's core business is commerce, but Ali's business has the motivation and willingness to break through the border and build infrastructure more deeply.

After the Spring Festival in 2009, a group of young people wrote the first line of code of Alibaba cloud computing operating system "Feitian" in an office which was about to be abandoned in Shangdi Huizhong building in Beijing, opening a new chapter of cloud computing in China.

Alicloud has been established for 11 years, and rookie has been established for 7 years. "Ali has a saying called" crawler development ", which means that we always work for today, invest for tomorrow, and incubate for the future." Zhang Yong said.

Just like an armored vehicle, the track is one section after another. The front wheel should be led and the rear wheel should be rotated to advance solidly.

From the initial B2B (1688) → C2C (Taobao) → B2C (tmall) → Finance (Alipay) → cloud computing (Alibaba cloud) / logistics (Rookie), the final system is more and more perfect, evolving from a simple trading platform to the infrastructure of digital economy.

In this quarter, cloud computing revenue was 16.115 billion yuan, up 50% year-on-year, and the adjusted EBITDA (a non GAAP financial indicator) achieved positive growth.

In this quarter, new retail and direct businesses accounted for 23% of total revenue, 5% for rookies, 4% for local living services and 7% for cloud computing. Diversified development has led to changes in Ali's overall income structure.

"We say sowing, growing and making profits. Today's rookie is a growing business, and cloud is a profitable business." Ali CFO Wu Wei said.

A few years ago, Alibaba's investment in new retail businesses such as HEMA has become a driving force for the growth of the platform. Achieving stable growth of multiple engines is the result of Alibaba's investment in tomorrow. Alibaba's investment in big data, cloud computing, artificial intelligence and other new technologies is increasingly applied to projects. The shadow of new technologies can be seen in logistics, chips, artificial intelligence and other fields, which is also the result of Alibaba's investment in tomorrow. Today's investment in businesses, investment in tomorrow, these investments may not have an immediate effect in the short term, but enterprises focus on providing sustainable growth for enterprises.

At the end of the financial report conference call, there was a question from investors. How can Alibaba balance its investment in new business innovation? Wu Wei's reply is very simple, "in terms of business and growth, we will not hesitate to invest in the future."