Now, with the restructuring and new management in place, we are even more confident in becoming one of the top e-commerce businesses in China. According to a recent report, Alibaba Group Chairman Joe Tsai said in an interview last Friday (February 23) that after a period of pressure, Alibaba has returned to the track of top e-commerce market participants.
We're not as confident as we used to be, we're feeling the pressure of competition, but now we're back. ”
In this exclusive interview with CNBC, Tsai reiterated Alibaba's focus on e-commerce and cloud. At the same time, Tsai Chongxin expressed his latest views on topics such as the spin-off of the cloud business, the progress of Cainiao's listing, and whether to deploy in the United States. Talking about Ma Yun and his own increase in Ali's **, he said: The founder of the company has become an important shareholder, showing confidence in the company, which is a very important signal.
* Screenshots. With the rise of e-commerce upstarts such as Pinduoduo and the popularity of live streaming tracks such as Douyin, Ali e-commerce is facing more fierce competition. The organizational changes initiated by Alibaba in March last year also do not seem to be going well, and in November 2023, Alibaba announced that it would not move forward with a complete spin-off of Cloud Intelligence Group. After the change in management, there is more and more talk about how Ali can get out of the predicament.
In a recent interview, Tsai reiterated that Alibaba will focus on e-commerce and cloud, which has already been discussed by Alibaba executives in previous earnings conferences. Tsai said that China's e-commerce accounts for about 30% of total retail sales, but this penetration rate is expected to rise to 40% or even higher in the next five years, which is the long-term driving force of Alibaba's e-commerce business. "This is an industry that has been growing for a long time, and we are very excited about it. ”
When asked about AI e-commerce and industry competition, Tsai Chongxin said that Ali's e-commerce business has 33 million 88VIP member users, and while serving this group of consumers well, all other consumer groups need to be served well, and now they are very concerned about these needs. At the same time, he emphasized that competitiveness is important, but more important is the consumer experience.
In December last year, ** issued new regulations to support "refund only", and this news then rushed to the top of the hot search.
Screenshot of social platform.
Tsai Chongxin revealed that e-commerce is the most abundant AI application scenario, and there is great potential for development through AI and algorithms to match demand and supply. Tsai Chongxin said that Alibaba is increasing investment in related technologies, such as striving to increase the purchase frequency and order volume of users through more accurate supply and demand matching; For example, AI programs and their capabilities can be used to bring more diverse experiences, such as virtual clothing "fitting rooms".
Another focus of attention is the fate of businesses such as Alibaba Cloud.
In May last year, Alibaba Cloud said that it planned to completely spin off Cloud Intelligence Group from Alibaba Group and complete the listing in the next 12 months, forming a new company completely independent of Alibaba Group in terms of equity and corporate governance, and will also introduce external strategic investors. However, half a year later, in November, Alibaba changed its view, "The complete spin-off of the Cloud Intelligence Group may not be able to enhance shareholder value as originally envisaged, so it has decided not to move forward with the full spin-off of the Cloud Intelligence Group." ”
In a good market environment, it makes sense to value part of the business independently through capital market transactions, and the business value will be more transparent to investors, so that investors can value the whole business through the classification and aggregation valuation method. But since the restructuring was announced in March last year, market sentiment has been sluggish, and conducting capital market transactions has not been able to bring transparency to the potential value of the business. "So we decided, first, not to spin off the cloud business, but to focus on the synergies that the cloud can bring to the core business; Second, in the current market environment, for rookies, we hope to wait for a better time to go public. ”
In the latest interview, Tsai said that China's economy is in the process of digitalization and there is a huge demand for cloud computing. "China accounts for about 17% of the world's GDP, and China's digital scale is equivalent to 30% of the world's, which is a very, very good market for developing cloud computing business. ”
At the financial report** meeting for the third quarter of fiscal year 2024 (as of December 31, 2023), Alibaba management revealed that Alibaba Cloud has taken the initiative to reduce the revenue from those low-margin project contracts. The group's revenue grew 3% and adjusted EBITA grew 86%, driven by good growth in public cloud revenue from external customers.
2023 is a year for Chinese e-commerce companies such as Temu, Shein, and TikTok to compete fiercely for overseas markets. The U.S. market is one of the focuses.
Asked whether Ali will also enter the U.S. market, Tsai Chongxin said that China's manufacturing is of high quality, reasonable and highly valuable to consumers, and Ali will observe and think about the next move. At the same time, he also stressed that "the United States is only a part of the world, there are other markets in the world that can participate, and our e-commerce platforms such as AliExpress and Trendyol have been successful in other markets in the world, and we will continue to implement our strategy in these regions." ”
According to previous market news, Alibaba Group founders Jack Ma and Tsai Chongxin significantly increased their holdings in Ali**. With Jack Ma buying about $50 million worth of ** in the fourth quarter, his stake in Alibaba surpassed 43%, becoming the largest single shareholder of Alibaba; The second largest shareholder is Tsai Chongxin, chairman of Alibaba. Previously, he also increased his holdings by 1. through his family investment platform$500 million Ali**.
Talking about Jack Ma and Tsai Chongxin becoming Alibaba's largest individual shareholders, Tsai Chongxin said in the latest interview that the company's founders have become important shareholders, demonstrating confidence in the company, which is a very important signal. As the chairman, he believes that the most important thing is that a strong management team is in place to inject new vitality into management and new confidence into employees.
This article is an exclusive manuscript of the Observer.com, and it is not allowed to be unauthorized and shall not be allowed.