The past fiscal year 2024 was a year of sharp turnaround for Alibaba Group. After opening the prelude to proactive change, Alibaba has established two major strategies of "user first, AI driven", focusing on the two core businesses of e-commerce and cloud computing in the future. Adjustments in core products, experiences, and services have also followed suit.
This season, Alibaba has submitted a financial report that has seen initial results in change and has stabilized its confidence in change. Relevant data shows that Alibaba is returning to a healthy growth track, and the data shows that the strategic direction is correct. As a result, in the fierce domestic e-commerce competition this quarter, Taobao and Tmall GMV achieved double-digit growth, and Alibaba Cloud actively adjusted its revenue structure to seek high-quality growth from public cloud and AI. This quarter has also demonstrated the correctness of strategic choices with solid progress - double-digit growth in core public cloud product revenue and triple digit growth in AI related revenue. In the competition for new blue ocean overseas e-commerce battlefield, AIDC's revenue maintained a strong year-on-year growth of 45%.
If placed within the complex external challenges and intense internal adjustments that Alibaba has faced in the past year, it will be easier to understand how many challenges and difficulties the elephant needs to face to dance again in just one year. However, Alibaba has indeed presented such a report card with many highlights.
A more positive trend is in the future. This year's organizational and business transformation has come to an end, and Alibaba is standing at a new starting point. It is not only the starting point of Alibaba's new fiscal year in terms of time, but also the ability to focus on shaping the competitive advantage of core businesses, and return to the starting point of growth according to the established strategic path.
Taotian GMV and order volume achieved double-digit growth
As the core e-commerce base of Alibaba, Taotian Group's performance in this quarter has become an important highlight in its financial report. Based on the "user first" strategy, providing consumers with a shopping experience of "good products, good prices, and good services", Taobao and Tmall have launched intensive reform measures this quarter, increasing investment in related fields. It can be seen that Taotian's strategy of price competitiveness and user experience is achieving results.
This quarter, Taotian Group's revenue reached 93.216 billion yuan, a year-on-year increase of 4%. Among them, customer management revenue (CMR) increased by 5% year-on-year, exceeding market expectations, mainly driven by strong revenue growth from search and recommendation.
According to the financial report, as of March 31, the total transaction volume (GMV) and order volume of Taobao and Tmall online products have achieved double-digit year-on-year growth, with the number of 88VIP members exceeding 35 million, maintaining double-digit year-on-year growth. This reflects the increasing willingness and trust of multi-level consumers on the platform.
For Alibaba at present, the growth of GMV and order numbers is more valuable. Only when the platform invests in users, consumers choose the platform, and GMV takes the lead, can it ultimately be reflected in revenue and profit figures.
Previously, Wu Yongming had already set the tone for Taotian: 2024 will be a year of comprehensive capacity improvement for Taotian Group, and it will also be a year of investment. On April 10th, Alibaba founder Jack Ma also mentioned in an internal letter that e-commerce in three years is definitely not the hottest e-commerce today. The important thing is not who to catch up with today, but how to improve the consumer experience of e-commerce tomorrow.
In the past few months, Taotian has been increasing investment around the core of user experience and making key investments throughout the entire chain.
Starting from the end of December last year, Taobao successively launched a series of measures, including a refund only policy, free shipping service in Xinjiang, use before pay, standardizing pre-sale time and false shipping issues, upgrading the store experience rating system, and comprehensively renovating the web version, to enhance the entire user experience from pre-sales, during sales to after-sales.
For the highly active, high purchasing power, and high stickiness group accumulated by Taobao over the years, such as 88VIP, Taobao has introduced value-added services such as unlimited returns, free shipping, and points for cash red envelopes. This layered and refined operation strategy has also achieved results, and high purchasing power groups are accelerating their influx into Taobao.
In addition to focusing on user experience, Taobao is also continuously promoting price power construction and expanding high-quality and low-priced supply. In April, Taobao launched its first "Billion Second Sale Festival" with a subsidy of 10 billion yuan, allowing users to make purchases without the hassle of bargaining or comparing prices. On the basis of low prices across the entire network, it offers an additional 30% discount. At the beginning of the year, Taobao Factory also deepened its industrial belt and further upgraded to create better cost-effectiveness on the Taotian platform.
On the business side, in order to help businesses reduce costs and increase efficiency, Taotian Group has successively released 10 AI management tools since 2024. In April, it announced that important business services, including business staff, store Xiaomi customer service robots, and image space, will be fully provided for free. Alibaba Mama has launched a "full site promotion" traffic operation solution to help businesses reduce operating costs, and high-quality merchants can also get results faster.
From merchants, products to products, Taotian is implementing changes in every detail of the e-commerce industry chain. For an app of such size, change is not easy, but the financial report numbers also indicate that the direction of proactive change is undoubtedly the right one.
Recently, QuestMobile released the 2024 China Mobile Internet Spring Report, which shows that the head effect is increasingly obvious in China's mobile shopping industry, and the industry concentration continues to increase. In terms of user scale, Taobao ranks first with 928 million monthly active users, far ahead of Pinduoduo's 677 million and JD.com's 507 million.
Wu Yongming said in a conference call after the financial report, "With the gradual advancement of product improvement and investment strategies under the 'user first' strategy, we have full confidence in continuously winning consumer trust and maintaining a leading market share position."
AI brings new growth space to Alibaba Cloud
Alibaba Cloud adheres to the "public cloud first, AI driven" strategy, and the adjustment of its revenue structure is nearing its end. Leveraging its technological and scale advantages, it focuses on increasing the amount of public cloud procurement, actively reducing project-based contracts with lower profit margins, and continuously improving the quality of revenue.
This quarter, Alibaba Cloud's revenue was 25.595 billion yuan, a year-on-year increase of 3%. Among them, core public cloud product revenue achieved double-digit year-on-year growth, AI related revenue growth accelerated, and continued to achieve double-digit year-on-year growth. Meanwhile, Alibaba Cloud continued to make profits, with an adjusted EBITA growth of 45% year-on-year, reaching 1.431 billion yuan.
Based on the cost advantage brought by large-scale infrastructure and advanced technology, on February 29, 2024, Alibaba Cloud announced the largest price reduction in history. The official website prices of over 100 products and over 500 product specifications were reduced by an average of 20%, with a maximum decrease of 55%. Millions of enterprises will directly benefit. According to the financial report, in April 2024, Alibaba Cloud will further expand its price reduction measures to overseas public cloud products, enhancing its competitiveness in the global market.
The innovation and application explosion of AI technology have strongly driven the growth of traditional cloud computing demand, and also brought new growth space to Alibaba. The financial report shows that demand from basic model companies, Internet companies, and customers in different industries such as financial services and automobiles is growing strongly. It is expected that public cloud and AI related products will achieve strong revenue growth.
Alibaba Cloud has been entering the big model market for a year and has been adhering to the open-source model, but it is also laying out closed source models and comprehensively promoting the industrial application of AI big models. Currently, Alibaba Cloud has established strategic partnerships with most of the leading Chinese model companies.
Alibaba's self-developed large-scale model, Tongyi Qianwen, which has been launched for one year, released its Tongyi Qianwen 2.5 version on May 9th, equaling the GPT-4 Turbo in score on the authoritative benchmark OpenCompass. At the end of April, the 110 billion parameter model Qwen1.5-110B, which was open sourced, topped the HuggingFace Open Source Big Model Ranking and is currently at the top level among global open source models.
Wu Yongming stated in a conference call after the financial report that the Tongyi Big Model and Alibaba Cloud's advanced AI infrastructure will be deeply integrated to achieve collaborative optimization at the software and hardware levels, striving to create an AI development platform for the industry that has both top-notch AI capabilities and excellent cost-effectiveness, and redefine the industry's benchmark for cost-effectiveness.
"Based on a leading product portfolio, a strong layout of AI infrastructure, and an active industry partnership strategy, we are confident that Alibaba Cloud's commercial revenue (excluding group customers) will return to double-digit growth in the second half of the 2025 fiscal year," said Wu Yongming.
Accelerated overseas growth and improved operational efficiency of other businesses
Alibaba's overseas related businesses have also performed well. This quarter, the group's revenue increased by 45% year-on-year, reaching 27.448 billion yuan, and the overall quarterly orders of its retail platform increased by 20% year-on-year.
Among them, the international retail commercial revenue was 22.278 billion yuan, a year-on-year increase of 56%; The international wholesale commercial revenue was 5.17 billion yuan, a year-on-year increase of 11%. The financial report shows that Alibaba's strong performance in overseas e-commerce is mainly driven by the growth of cross-border business, especially the Choice business on the AliExpress platform.
Thanks to the Choice business, AliExpress continued to achieve strong year-on-year growth in orders this quarter, and its synergy with Cainiao in cross-border logistics further strengthened its competitiveness. The delivery rates for cross-border packages on the 5th and 10th day both doubled year-on-year. In April 2024, Choice accounted for approximately 70% of the overall orders on AliExpress.
Alibaba's financial report shows that more resources will be invested in cross-border e-commerce in the future, reaffirming the customer value proposition of price power and timely delivery to global consumers.
At the level of overseas local e-commerce, Trendyol continued to maintain double-digit growth in orders. In addition to maintaining its leading e-commerce position in Türkiye, Trendyol further expanded its business to the Gulf region, increased investment in consumer experience, expanded commodity categories and provided fast and reliable logistics services. Trendyo became one of the most downloaded e-commerce apps in the Gulf region this quarter. Lazada continued to improve operational efficiency this quarter, with losses per transaction significantly narrowing year-on-year.
This quarter, Cainiao's revenue increased by 30% year-on-year to 24.557 billion yuan. After Cainiao withdrew its IPO in March, it continued to enhance collaboration with domestic and foreign e-commerce businesses, provide differentiated high-quality services, improve logistics efficiency and user experience. Alibaba continues to support Cainiao in promoting the construction of a global intelligent logistics network. This quarter, the revenue from cross-border logistics fulfillment services supporting AliExpress has driven Cainiao's quarterly revenue growth. During the quarter, Cainiao has added 4 countries to the coverage of high-quality logistics services from the 5th to the 10th, covering a total of 14 countries.
Meanwhile, the operational efficiency of other business groups continues to improve. The quarterly revenue of the local lifestyle group increased by 19% year-on-year to 14.628 billion yuan, and the losses continued to narrow. Benefiting from the increase in trading users and purchase frequency, Ele.me's order volume has grown strongly year-on-year.
Alibaba Group Chief Financial Officer Xu Hong said, "Alibaba Group has performed strongly this quarter, with revenue increasing by 7% year-on-year. Our strong investment in strategic priority businesses has shown initial results and we are confident in our business prospects. We will continue to fulfill our commitment to improving shareholder returns. In fiscal year 2024, Alibaba has repurchased $12.5 billion in shares, and the board of directors has approved a dividend of $4 billion for fiscal year 2024."
Looking back at the fiscal year 2024, Alibaba demonstrated its determination to "start anew" through practical actions and a comprehensive increase in core indicators in its financial report. However, strategic success lies in execution. Today's Alibaba will implement changes in the four core directions of Taotian, Cloud, Overseas, and AI, and the future may be even more worth looking forward to.