Alibaba and the Future of Commerce

Alibaba held the company’s first investor relations day on June 14th. It was the first big update on how the Chinese online retail giant views itself and the world since the company’s IPO in 2014.

Here a first overview from the introductory presentation:

Alibaba IR 2016

Already, Alibaba has an “OS for smart home, cars, IoT devices” on its agenda. For a company this size this makes sense. It remains to be seen if Alibaba also can deliver and indeed foster a meaningful evolution of its business.

In 2020, Alibaba wants to have reached a gross merchandise volume of one trillion US-Dollars; and within 20 years the company wants to have reached two billion consumers:

Alibaba's goals

From Alibaba’s own summary of the investors day:

Ma also said the company wants to become the world’s fifth-largest economy in 20 years.

To close the remaining gap, the company will focus on growth in three areas: expanding its business overseas, targeting China’s rural consumers and leveraging its trove of shopping data to better serve its users and the merchants trying to reach them. (…)

Chief Financial Officer Maggie Wu (…) announced that the company will begin providing annual revenue guidance. Fiscal year 2017 total revenue growth would come in at more than 48 percent year-over-year, Wu said. (…)

Last year, the company bought a 20 percent stake in Chinese electronics retailer Suning for $4.63 billion and put $1 billion into local services provider Koubei.com. More recently, Alibaba invested $1.25 billion in food-delivery serviceEle.me and $1 billion in Southeast Asian e-commerce marketplace Lazada Group. (…)

When describing the company’s logistics strategy, [Executive Vice Chairman Joe Tsai] said it was more efficient for Alibaba to connect the existing logistics providers in China by forming a consortium—Cainiao Network—than to build and operate its own in-house delivery network.

Today Cainiao, which has 1,200 employees, handles some 33 million packages a day, he said. (…)

The usage numbers for Mobile Taobao are, frankly, insane:

Mobile Taobao has 369 million monthly active users, while over 150 million use the app every day. About three-quarters of Mobile Taobao users are under age 35, and active users open the app an average of 7.2 times daily and view an average of 18.9 products.

That is the result of a mobile only world.

There is a lot to discover in the 15 presentations from Alibaba’s investors day. We are going to dive deeper into some of them over the course of the next days.

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5 comments

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