Not to mention the past glory and pain, Ali has entered a new cycle.Text: "Chinese Entrepreneur" reporter Deng ShuanglinEdited by Li Wei
Header image** Respondents
Ali's new retail era led by Daniel Zhang is being re-examined by Ali. In fact, since 2020, Ali has rarely mentioned the word new retail.
According to the report, Alibaba is considering its department store and shopping mall operator Yintai Retail. According to people familiar with the matter, Alibaba has started relevant discussions before and after Tsai Chongxin became chairman of the board of directors of Alibaba Group in September 2023.
At present, Alibaba has been in contact with several potential buyers to see if they are interested in acquiring Yintai. In this regard, "China Entrepreneur" asked Alibaba for verification, but as of press time, there has been no response.
Yintai was once one of the biggest bets on Alibaba's new retail strategyIn 2014, Alibaba took a stake in Intime Department Store, becoming the second largest shareholder after Yintai founder Shen **. In 2015, Alibaba increased its stake in Yintai ** and became the largest shareholder, with Daniel Zhang as CEO; In 2017, Alibaba privatized Yintai for 17.7 billion yuan, and Jack Ma paid a very high premium for the acquisition, and Yintai was completely acquired by Alibaba.
It's a big gamble on the future. At the end of 2016, Jack Ma first proposed the new retail concept on a niche occasion, and then Daniel Zhang took over the mantle and led Alibaba's strategic investment in Suning, Yintai, Sanjiang Shopping, Bailian, Sun Art Retail, etc., and created a new species, Hema Horse.
New retail has changed almost the entire business direction of Alibaba——Alibaba has changed from an Internet company dominated by e-commerce to a comprehensive economy with diversified business-driven development from online to offline.
At the time of the acquisition of Yintai Retail, Daniel Zhang said: "Alibaba has a very clear positioning of Yintai Retail, and it will be a major ship in the Alibaba Group's fleet, undertaking the mission of transforming and upgrading online and offline retail department stores." In 2019, Alibaba shouted the slogan of "building another Intime Department Store in the next five years".
But today, Yintai's role has not been highlighted, and new retail seems to be doing more harm than good to Alibaba's mission. Five years have passed, and Yintai has not reinvented, but has been considered by Alibaba**.
Yintai is mainly distributed in first- and second-tier cities in China, and similar to Freshippo, its main consumer group is the middle class and above. But unexpectedly, ** sensitive consumption gradually occupies the mainstream, and the power of sinking markets and low prices is highlighted.
Ali's leadership misjudged the current situation of "consumption upgrading", causing Ali to miss the best opportunity to sink. Ali had to revalue the new retail.
In addition, Alibaba's focus on the main business has also put non-main businesses other than e-commerce and logistics (including cloud computing) into a delicate situation. In 2023,Eleme, Freshippo, and Youku have all reported news that their plans are going to be **,Although Ali denied it, these businesses did not perform well financially and are still losing money.
After the vigorous and resolute organizational change in 2023, Alibaba's positioning has changed to that of an investment holding company, and the function at the group level is to manage assets and funds. As an "investment holder", it is necessary for Alibaba to sell off or increase the value of the group's asset portfolio. This is also the direction that the new leaders Tsai Chongxin and Wu Yongming are good at.
*Yintai is just the beginningIn addition to e-commerce and logistics, Ali sells everything.
As the benchmark of Alibaba's new retail strategy, this Yintai acquisition has three key figures: Jack Ma, Shen **, and Daniel Zhang.
Ma Yun and Shen ** have a very personal relationship. According to Shen **'s own account back then, he and Ma Yun met on the plane around 2005. In 2010, Ma Yun, Shen ** and others jointly initiated the establishment of Yunfeng**; In 2013, Alibaba led the establishment of Cainiao Network, Yintai invested 1.6 billion yuan, accounting for 32% of the shares, becoming the second largest shareholder, with Ma Yun as chairman and Shen ** as CEO. In 2015, under the planning of Ma Yun, the General Association of Zhejiang Entrepreneurs was formally established, and Ma Yun served as the president. In the same year, Shen ** invested in MYbank, a subsidiary of Ant Financial, and became a shareholder.
From the strategic investment in 2014, to the increase in shareholding in 2015 to the largest shareholder, and then to the complete control in 2017, the alliance between Jack Ma and Shen has become firmer.
Maybe out of favor, maybe out of optimism about the new retail strategyJack Ma paid a steep premium in his acquisition of Yintai.
Before the privatization in 2017, Yintai's total revenue was about RMB6 billion, with a growth rate of 4%, and the profit attributable to shareholders was 13200 million yuan, the growth rate is only 02%, falling into a state of sluggish growth. Alibaba's purchase price was HK$10 shares, a premium of about 42% over Yintai's price at that time.
Another key gentleman is Daniel Zhang.
While Jack Ma privately brokered the acquisition, it was Daniel Zhang who led the deal. The new retail strategy was proposed by Jack Ma, but it is still Daniel Zhang who carries it forward.
This is not difficult to understand - as the pioneer of Tmall and "Double 11", Daniel Zhang has made great contributions to Alibaba in the period of rapid development, and it is only fitting that he will inherit the mantle of Jack Ma and start the next strategic cycle of Alibaba.
In terms of the underlying logic of consumption upgrading, Daniel Zhang vigorously promoted the online and offline integration of new retail, incubating Freshippo, investing in Sun Art Retail, and acquiring Ele.me. The massive investment in new retail has indeed provided Alibaba with an almost endless growth boost for some time. Under the leadership of Daniel Zhang, Alibaba's annual sales exceeded one trillion US dollarsAt one time, it became the most valuable company in China, bringing huge returns to shareholders.
However, since 2020, this strategy has pressed the "reverse button".
On December 14, 2020, the State Administration for Market Regulation announced that in accordance with the provisions of the Anti-Monopoly Law, the State Administration for Market Regulation conducted an investigation into the illegal implementation of the concentration of undertakings in Alibaba Investment's acquisition of Yintai Retail (Group)**'s equity in accordance with the law, and imposed an administrative penalty of a fine of 500,000 yuan on Alibaba Investment***.
Combined with the impact of special circumstances on offline consumption and the reversal of consumption trends, Alibaba's core e-commerce revenue has slowed down, and Chinese concept stocks have also collectively fallen into a downturn. In this context, Ali has hardly focused on new retail since then, and has no ability to mention it.
In 2023, Ali will endure painful changes, from the drastic "one split six", to the suspension of the listing of Hema and Alibaba Cloud, and the contraction and focus on the main business, Ali has gone through two sets of leadership teams, and its strategy has changed impermanently.
What remains unchanged is that after the return of the soul character Ma Yun, he pointed out three directions for Ali:Return to the user, return to the Internet. At that time, this set of statements fell into the front line and was still vague, and there were speculations of different voices within Ali. Now it seems that the three "Tropic of Cancer" have gradually become clear-
*: Respondents returned**, that is, their energy was concentrated on the main business of e-commerce, and diversified businesses were focused on shrinking; Return to the user, that is, the user first, pay attention to the user's low-price mentality. In the past, Taotian's consumption upgrade was actually based on merchants first, attracting merchants to do branding on the platform, although it has achieved certain results, but it has allowed Pinduoduo to grow savagely; Returning to the Internet, that is, attaching importance to online and cloud business, etc., has to make trade-offs in the offline asset-heavy business that has been dragged down, as can be seen from Yintai's actions in this plan.
It is true that Alibaba's new retail business has not yet seen results, and in addition to Yintai, a typical example is Sun Art Retail.
In 2020, Alibaba invested US$3.6 billion to become the controlling shareholder of Sun Art Retail, a pioneer in the hypermarket format, and Sun Art Retail is also one of the core members of Alibaba's new retail matrix.
ButSun Art's transformation has not been smooth. According to the financial report data, the company achieved revenue of 836 in fiscal year 20236.2 billion yuan, a year-on-year decrease of 51%；Net profit attributable to the parent company 10.9 billion yuan, to achieve a turnaround, but the scale of profits is still hovering near the breakeven line. According to the 2024 semi-annual report, Sun Art's retail performance has once again turned from a profit to a loss, and the loss margin is also widening compared with the same period last year. And since 2020, Sun Art's retail share price has fallen so much that it has almost "cut off its ankles".
In October 2020, Alibaba merged with Sun Art Retail. By the end of the year, the number of Alibaba employees had doubled to 25210,000 people; At the end of 2021, it will reach its peak of 25930,000 people. According to the latest financial report, as of September 30, 2023, the total number of employees of Alibaba is about 2250,000 people, among the tens of thousands of employees reduced by Ali in recent years, Sun Art retail employees account for the majority.
In December 2023, Dai Shan stepped down from the position of CEO of Taotian, and Ali announced that Dai Shan would take the lead in establishing an asset management company.
According to "Chinese Entrepreneur",Offline non-core assets such as Yintai and Sun Art Retail are most likely to be included in asset management companies and be included.
In fact, Alibaba's non-main businesses outside the core competencies of e-commerce and logistics may have brought synergy to Alibaba's overall business chain, but it has not yet brought significant increments to the company's market value or profitability.
Alibaba's establishment of an asset management company is, to a certain extent, also to solve the problem of too extensive self-operated business in the past.
New retail is by no means the last stop of contractionSome diversified businesses that do not perform well do not rule out the possibility of being recouped by Ali. In 2024, these actions will be accelerated.
The return to **, the return to users, and the return to the Internet that Ma Yun said are being strongly implemented by the new CEO Wu Yongming.
The glory and pain of the past are not mentioned, and Ali has entered a new cycle.
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