Recently, Alibaba's Chairman of the Board, Cai Chongxin, gave an interview to CNBC and provided many answers on topics of market concern, including the future expectations of Alibaba's core e-commerce business, the IPO situation of its business, and the market competition of the "Four Little Dragons Going Global".
Cai Chongxin and Jack Ma share the permanent partnership status of Alibaba and became the Chairman of the Alibaba Group's Board of Directors in September last year, partnering with Wu Yongming to become the latest helmsman of Alibaba. The market still cares about Cai Chongxin's latest positioning and evaluation of Alibaba in the current market environment.
In an interview, Cai Chongxin said, "With the restructuring and the arrival of new management, we have more confidence in becoming a top participant in China's e-commerce." He also said, "Although we may not be as confident as before, we have felt competitive pressure, but now we are back.".
"Wear back" has also become a keyword used by CNBC in news headlines.
Specifically, Cai Chongxin's "Wereback" mainly refers to Alibaba's core e-commerce business. At present, Alibaba e-commerce is facing intense impact from Pinduoduo and Tiktok e-commerce. When Cai Chongxin and Wu Yongming took office, Alibaba's management team constantly emphasized that they would focus on core business on several occasions. On the previous February 7 Alibaba Q3 financial report performance conference, the phrase used was "Revitalize Taotian".
Another thing that makes Cai Chongxin feel confident is the future market expectations. It is expected that the penetration rate of e-commerce in China will exceed 40% in the next five years, significantly higher than the current 30%. This means that there is still room for exploration in the Chinese e-commerce market. According to data from the Ministry of Commerce, the national online retail sales in 2023 were 15.4 trillion yuan.
Cai Chongxin also responded to the IPO situation of his business, but there is no new information available. Cai Chongxin said that if investor sentiment is high, Alibaba Cloud's IPO will be more meaningful. In addition, Cainiao Group's initial public offering is waiting for a better time, but the market has always been not good.
At the previous Q3 earnings conference call, Cai Chongxin faced the IPO issues of Hema and Cainiao and stated, "In the future, we will continue to create value through separate financing of different businesses. However, considering the current challenging market environment, we are not in a hurry to do so.".
More information comes from Cai Chongxin's evaluation of overseas business. It stated that TEMU, SHEIN, and TikTok are very active in overseas markets, and Alibaba is observing and deciding what to do. Cai Chongxin stated that "these companies offer a great consumer proposition" due to their high-quality products and reasonable prices.
These companies, also known as the "Four Little Dragons" in the cross-border industry, are expanding into overseas markets through AliExpress and Lazada (Southeast Asian market) and Trendyol (Middle East market) e-commerce, which focus on regional markets. In the third quarter of the 2024 fiscal year, Alibaba's international e-commerce revenue increased by 44%, becoming the fastest-growing business under Alibaba, with a revenue of 28.516 billion yuan, surpassing Alibaba Cloud to become the second largest business in terms of revenue scale.
Jiang Fan, who is in charge of Alibaba International Digital Business Group, previously stated that he believes that in a longer period of time, Alibaba's investment in overseas e-commerce can be relatively well recovered. "Therefore, we will continue to prioritize growth scale in the future."
At the time when Alibaba's Cai Chongxin shouted the slogan "were back", it meant that it not only wanted to "revive Taotian", but also continued to increase investment in overseas e-commerce business to compete in the market with TEMU, SHEIN, and TikTok. The follow-up promotion of these two indicators may be the most important evaluation dimension for whether they truly return to the track of top market participants.