The e-commerce giant’s focus on enhancing customer experience and strategic investments has resulted in notable year-over-year growth, despite challenging market conditions.

Strategic Initiatives and Business Review

Alibaba’s strategic initiatives have significantly impacted key sectors, including e-commerce, cloud computing, digital media, and logistics. The company’s focus on improving user experience, technological advancements, and expanding international commerce has paid off.

• E-commerce: Alibaba’s Taobao and Tmall Group saw a 4% year-over-year revenue growth, reaching RMB 93.2 billion, driven by a 5% increase in customer management revenue. The group also reported double-digit growth in online GMV and orders.
• Cloud Computing: The Cloud Intelligence Group reported a 3% revenue increase, reaching RMB 25.6 billion, with a notable 45% rise in adjusted EBITA. This growth was driven by higher adoption of public cloud services and AI products.
• International Commerce: The Alibaba International Digital Commerce Group experienced a 45% revenue increase to RMB 27.4 billion, thanks to strong performance in cross-border e-commerce, particularly from AliExpress.
• Logistics: Cainiao Smart Logistics Network’s revenue surged by 30% to RMB 24.6 billion, primarily due to increased demand for cross-border fulfillment services.
• Local Services Group: Reported a 19% revenue increase to RMB 14.6 billion, driven by Ele.me and Amap’s strong order growth.
• Digital Media and Entertainment Group: Revenue slightly decreased by 1% to RMB 4.9 billion, despite growth in Alibaba Pictures and Damai.

Financial Highlights

Alibaba’s financial results for the March quarter demonstrated resilience and strategic growth:

• Revenue: The company reported a 7% year-over-year increase in revenue, totaling RMB 221.9 billion (US$30.7 billion).
• Income from Operations: Despite a 3% decline, income from operations stood at RMB 14.8 billion (US$2.0 billion).
• Net Income: Net income attributable to ordinary shareholders decreased by 96% to RMB 919 million (US$127 million), mainly due to investment losses.
• Adjusted EBITA: Non-GAAP adjusted EBITA decreased by 5% to RMB 24.4 billion (US$3.3 billion).
• Share Repurchases and Dividends: Alibaba repurchased US$12.5 billion worth of shares in fiscal 2024 and announced a US$4.0 billion dividend.

Alibaba’s Q1 2024 results highlight the success of its strategic initiatives and investments in enhancing customer experience and technological infrastructure. The company’s focus on e-commerce, cloud computing, and international expansion positions it well for future growth. As Alibaba continues to innovate and adapt, it remains committed to delivering value to shareholders and capturing new market opportunities.

Taobao emerged as a defensive strategy against potential C2C competition from eBay’s Chinese platform, Eachnet​. Taobao’s innovative strategies, such as introducing Alipay to ensure secure transactions, helped it secure a substantial market share.

On the 20th anniversary of its founding, Taobao is set to host the most significant 618 Shopping Festival to date. The festival’s evolution mirrors the transformative growth of e-commerce, driven by platforms like Taobao, which have revolutionized how people shop and interact with retailers.

For 2023, Taobao’s strategy for the 618 Shopping Festival revolves around transforming consumers into creators.

In an era where user-generated content has become integral to online engagement, Taobao aims to elevate the shopping experience beyond a simple transaction. This shift aligns with the broader trend in e-commerce, which has been accelerated by the global pandemic, towards more interactive and personalized shopping experiences.

Regarding impact on China’s economy, the 618 Shopping Festival’s contribution to Alibaba’s total revenue is significant​.

The event has grown exponentially since its inception, reflecting the rapid growth of China’s e-commerce sector. The 2023 edition of the festival is expected to further boost this growth trajectory, given the increased scale and novel consumer engagement strategies planned for this year.

The allure of low prices has always been a critical characteristic of online shopping festivals. However, in recent years, the price war has extended from festival periods to daily transactions, with short-term subsidies transitioning into long-term ones.

This shift has led to debates around the necessity of these online shopping festivals, especially as low prices have become somewhat of a norm in the aftermath of the pandemic.

Yet, low prices often come with certain preconditions or basic requirements. For instance, JD.com’s low prices have traditionally been established on multi-item discounts.

However, this year’s 618 Shopping Festival may improve the quality of service (such as half-day delivery service by Cainiao) and lower the threshold for discounted prices based on purchase quantity.

This approach focuses on the keyword “low price,” enhances service quality, and broadens the customer base. Despite low prices becoming a norm, festival periods offer an upgraded shopping experience compared to ordinary days.

In the current environment, improving the return on investment (ROI) for marketing communications remains a significant challenge for the entire industry. This challenge is primarily due to the broader economic environment, which has led to a trend of consumption downgrade.

The biggest dilemma is identifying target customers and stimulating consumer enthusiasm in challenging circumstances. The difficulties in content creation for product promotion and fulfillment of product promises play a significant role.

While merchants have adopted live streaming and digital marketing, attracting traffic in a fiercely competitive market using forms the audience enjoys is a major challenge.

Another concern is maintaining operations after traffic conversion, such as improving the customer experience (product quality and fulfillment, after-sales service, etc.). The entire process involves a long chain of stages, each demanding high professionalism and the ability to respond flexibly to market changes.

As the 618 Shopping Festival approaches, how should merchants prepare in advance? It is crucial to ensure sufficient preparation for product stock and transport capacity. For product inventory, merchants should rely heavily on data-driven predictions to stock up sufficiently in advance.

This preparation should not only be adequate in terms of quantity but also detailed in terms of warehouse distribution and logistics delivery.

At the end of 2022, during the Double 12 shopping festival, some users received their goods only after a month, leaving a bitter taste about the “express” delivery.

Most major platforms have deployed highly automated and intelligent warehouse logistics systems in key consumer markets. Barring uncontrollable factors such as adverse weather, delivery delays should be less frequent.

The issue during the 2022 Double 12 festival was partly due to the widespread transmission of the pandemic. Given the current state of pandemic transmission, a similar situation is unlikely to occur.

Nevertheless, express delivery companies should prepare and plan equipment maintenance, debugging, and personnel deployment. Platforms and merchants should prepare and plan sufficiently for sales predictions and stock-up.

618 Sales

This year no specific GMV or sales data are released from any major e-commerce platforms in China.

Alibaba Group’s Taobao and Tmall Business Group recorded an unprecedented level of merchant participation in China’s mid-year shopping festival, the 6.18, held from May 26 to June 20, spotlighting positive signs of Chinese consumers’ post-pandemic spending prowess.

Data released by Taobao & Tmall on Monday exhibited a paradigm shift in consumer behavior, particularly a surge in livestreaming viewership and short video consumption.

During the 6.18 festival, the daily average of short video views on Taobao, a consumer-to-consumer marketplace, increased by 113% from the previous year. Daily short-form video releases from influencers and Taobao merchants have increased by 200% and 55%, respectively, year over year.

Moreover, the festival witnessed a 139% year-over-year increase in content creators initiating livestreaming on Taobao. Consumers’ viewing time on the app doubled, demonstrating the growing influence of digital content in the e-commerce landscape.

The Gross Merchandise Value (GMV) of merchants reportedly swelled two to three-fold year-over-year. A total of 305 brands achieved sales above RMB 100 million ($13.99 million) just after the stroke of midnight on June 18.

Additionally, over 2.56 million small- and medium-sized enterprises (SMEs) outperformed last year’s festival, with 1.18 million SMEs each surpassing a GMV of RMB 10,000.

The festival also shed light on new consumer trends, with items like watersports shoes, suitcases, and sunscreen masks being the hot favorites. Around 180,000 customers purchased watersports shoes, while suitcases and sunscreen masks were snapped up by 1.65 million and 930,000 people, respectively.

Apple, which held a rare livestream and offered discounts on its products, including the iPhone 14 Pro and Apple Watch Series 8, saw their broadcast attract 1.3 million viewers and collect 300,000 likes within the first hour.

In this year’s 6.18 shopping festival, video-sharing platform Bilibili saw a surge in its e-commerce advertising revenue, which jumped by more than 400% year-on-year.

Product promotion is becoming a new revenue growth engine for both Bilibili and its content creators, with the number of promoters more than tripling compared to last year’s 6.18.

As the consumption and transaction ecosystem thrives, the number of promotional videos on the site has increased nearly eightfold year-on-year, while the number of promotional livestreams has grown almost 7.5 times over the same period.

During the 6.18 period on Bilibili, the number of content creators who received orders from advertisers through Huahuo increased by over 40% year-on-year.

According to data from the “Spark Program,” which is linked to the Taobao Union (Taobao’s affiliate program), in industries such as home decor and cosmetics, Bilibili accounted for more than 70% of new customers for merchant shops.

Zhihu, a Chinese question-and-answer website, saw a 155.1% year-on-year increase in queries related to “how to choose products.” By the end of May, the volume of content related to “618” on Zhihu had increased by 272% month-on-month, while search volume had risen by 240% over the same period.

Alibaba Group’s Double 11 Global Shopping Festival is the biggest shopping event. This year, the one-day event brought in over $30 billion in gross merchandise volume. Delivering these $30 billion goods to consumers replies a lot on Alibaba affiliated logistics company Cainiao (majority owned by Alibaba). In 2017, Cainiao delivered 812 million orders. But how?

Cainiao recently opened the biggest automated warehouse in China, in the eastern city of Wuxi. It is part of the company’s first Future Park, a logistics complex run by IoT applications, big data, edge computing, and artificial intelligence to boost efficiencies in the shipping process.

Cainiao uses 700 robots called automated guided vehicles to fulfill orders. The system directs the AGVs to drive, load and unload while planning the best routes to distribute parcels and avoid collision. The robots allow for 50% more orders to be processed within a given time period than a traditional warehouse, according to Cainiao.

AliExpress, Alibaba’s export retail e-commerce platform, and Tmall World, a site aimed at Chinese consumers living abroad, took on a bigger role in this year’s Double 11. Cainiao chartered 51 flights to Western Europe, Russia, and Southeast Asia, as well as about 1,000 shipping containers set for buyers in Southeast Asia and other destinations by sea.

Watch this one-minute video to find out how it works:

Get the latest update on Alibaba Double 11 2018 here.

Singapore Airlines (SIA) and Alibaba Group this week announced a comprehensive strategic collaboration aimed at enhancing the customer experience for travelers. The collaboration encompasses several players in Alibaba Group’s ecosystem including Fliggy, Alibaba Cloud, Alipay and Cainiao Network.

The partnership extends across areas such as flight ticket sales, loyalty programs, marketing initiatives, cloud services, payments and logistics. SIA and Alibaba Group will gain actionable customer insights for the benefit of travelers in one of the world’s fastest growing travel markets.

The tie-up represents a significant extension of a partnership between SIA and Alibaba Group’s affiliate, Alipay, which was introduced as a payment option on SIA’s website in 2013. In 2016, an official SIA flagship store was also launched on what was then known as Alitrip (later rebranded “Fliggy”), Alibaba’s travel service platform, for direct purchase of SIA flight tickets by consumers in China.

Related: Insights of Starbucks and Alibaba’s strategic partnership

KrisFlyer and Fliggy will introduce two-way points conversion, allowing members to enjoy membership perks from both loyalty programs. KrisFlyer members will be able to convert their KrisFlyer miles to Fliggy points, and Fliggy members will be able to convert their Fliggy points to KrisFlyer miles. SIA and Fliggy also intend to explore further opportunities to sync their respective loyalty programs and to drive cross-promotion of membership services.

In addition, eligible Fliggy members at certain loyalty program tiers will be able to earn KrisFlyer Elite Silver or Gold status. Accompanying privileges could include tier bonuses on actual miles flown, priority reservation waitlist, seat selection privileges and priority baggage handling. Fliggy members who achieve KrisFlyer Elite Gold status can also receive benefits from the entire Star Alliance network, the world’s largest airline alliance.

The collaboration is also expected to cover the following areas:

• SIA and Alipay, the world’s largest mobile and online payment platform operated by Ant Financial, will work on extending Alipay acceptance beyond flight purchases to also cover in-flight products and services, airport services, retail merchandise and ancillary touchpoints.
• Together with Alibaba Cloud, the cloud computing arm of Alibaba Group, SIA will explore how its IT ecosystem – from web hosting to apps and membership systems – can benefit from Alibaba Cloud’s global network.
• SIA will work closely with Cainiao Network, the logistics arm of Alibaba Group, to enhance international air cargo services, joining Cainiao Network’s broader efforts in building a global smart logistics network that delivers across China within 24 hours and globally within 72 hours.

China online travel market insights Q1 2018, led by Ctrip, Qunar, and Fliggy

In the ninth year of the world’s largest 24-hour shopping event, this year’s Tmall Double 11 2017 will showcase:

Alibaba Economy at scale. 11.11 will demonstrate the technological innovation and global scale of the entire Alibaba Economy. More than 140,000 brands and hundreds of millions of consumers will participate in 11.11 this year. This shopping festival will be supported by Alibaba’s global cloud, payment and logistics infrastructure.

Consumers will enjoy seamless payment and consumer loan services provided by Ant Financial. Alibaba Cloud will serve as the core technology and computing backbone to ensure the best consumer experience throughout the festival. Cainiao Network expects over 3 million logistics personnel to facilitate the hundreds of millions of packages that will be generated from the festival.

The number of annual active consumers on Alibaba’s China retail marketplaces reached 488 million, an increase of 22 million from the 12-month period ended June 30, 2017. See the performance highlights of Alibaba in Q3 2017 here.

Power of the Chinese consumer. Alibaba expects that hundreds of millions of Chinese consumers who visit its platforms on November 11 will have access to over 60,000 international brands and merchants to satisfy their increasing demand for goods and products from around the world. This year, Tmall will, for the first time, leverage its popularity outside China to bring over 100 domestic Chinese brands to international markets, targeting millions of overseas Chinese consumers in Asia and the rest of the world.

New Retail implementation. Alibaba’s New Retail model with integrated online-offline customer offerings will be showcased in store locations across China. More than 1,000 brands will convert nearly 100,000 physical locations into “smart stores” and our channel distribution solutions make it easy for more than 500,000 local neighborhood stores and Rural Taobao service centers to sell to consumers in lower-tier cities and rural villages.

Tmall Double 11 Sales Stats 2017

Total sales on Tmall Double 11 Shopping Festival reached 168.2 billion yuan in 2017 from 225 countries and regions, 90% from mobile.

167 merchants each has total transactions of over 100 million yuan. Nike store became the first one with over 1 billion yuan in apparel category.

Top 50 Tmall Stores on Double 11 2017

1. Suning
2. Xiaomi
3. Honor (Huawei)
4. Haier
5. Nike
6. Uniqlo
7. Sharp
8. Adidas
9. Linshimuye (furniture)
10. Midea
11. Quanyou (furniture)
12. GREE
13. Huawei
14. Gujia (furniture)
15. Heilan Home
16. PurCotton
17. Sanzhi Songshu (snacks)
18. P&G
19. Dyson
20. GXG
21. Balabala (children apparel)
22. New Balance
23. Semir
24. Peacebird
25. Jack Jones
26. Pechoin
27. Veromoda
28. ecovacs
29. Lancome
30. Zara
31. ONLY
32. Estee Lauder
33. Hisense
34. Anta
35. Philips
36. Gap
37. Chando
38. Eifini
39. Fotile
40. HSTYLE
41. Vivo
42. SK-II
43. Olay
44. Skyworth
45. Little Swan
46. Meters/bonwe (Apparel)
47. Xilinmen
48. Li Ning
49. Siemens
50. Bosideng (Apparel)

Outdoor sports

1. Nike
2. Adidas
3. Anta
4. New Balance
5. Li Ning
6. Sketchers
7. Puma
8. Xstep
9. Under Armour
10. Camel

Tmall Sales Progress on Double 11 2017

• 1 billion yuan: 28 seconds (vs. 52s in 2016)
• 10 billion yuan: 3 mins 1 seconds (vs. 6m 58s in 2016)
• 19.1 bn yuan: 5 mins 57s (exceeds total Double 11 sales in 2012)
• 36.2 bn yuan: 16 mins 10s (exceeds total Double 11 sales in 2013)
• 50 bn yuan: 40 mins 12s (vs. 2 hrs 30m 20s in 2016)
• 57.1 bn yuan: 1 hours 49s (exceeds total Double 11 sales in 2014)
• 91.2 bn yuan: 7 hours 22m 54s (exceeds total Double 11 sales in 2015)
• 100 bn yuan: 9 hours 4s(vs. 18 hrs 55m 36s in 2016)
• 120.7 bn yuan: 13 hours 9m 49s (exceeds total Double 11 sales in 2016)
• 168.2 bn yuan at 24:00

Alibaba Cloud processed 325,000 orders per second at peak. Alipay processed 1.5 billion payment transactions in total, up 41% from 2016, and processed 256,000 transactions per second at peak.

Other E-Commerce Platforms Double 11 Stats 2017

Total orders from 1 Nov till 7:46:58 on 11 Nov exceeded 100 billion yuan on Jingdong (JD). Total transactions on JD during the eleven days’ online sales reached 127.1 billion yuan with over 50% growth.

Netease Kaola total Double 11 sales value reached 4 times as much as last year’s. It reached the total transactions of last year’s Double 11 in the first 28 minutes. Kaola has 25.6% market share in China’s cross-border e-commerce market in Q3 2017 ranking first according to iiMedia.

Total orders on AliExpress exceeded 10 million as of 19:50 on Double 11 2017. It covers 184 countries and regions in the first two hours.

Find out more Singles Day 2017 Insights »

Cainiao Network, an Alibaba affiliate, was founded in 2013 to create a logistics information platform that links a network of delivery partners, warehouses, and merchants to make package deliveries faster and more efficient. 

Cainiao’s business covers express delivery, warehouse fulfillment, last-mile delivery, rural logistics and cross-border logistics.

Cainiao Network connects 6.1 million delivery routes, 2 million couriers, over 40,000 pick-up stations, 3,000 transportation companies, 30,000 rural villages, and 15 leading express delivery companies.

According to AliResearch, China’s logistics industry has grown by more than 50% for six consecutive years due to the increasing popularity of online shopping and e-commerce. Some 80 million parcels are delivered every day, adding up to 31.3 billion a year.

In March 2017, 81% of the shipping labels used by these express courier firms for orders generated on Alibaba’s China retail marketplaces used Cainiao Network’s standardized structured data format to ensure faster and more accurate delivery to consumers, up from 60% in the same period last year.

It has integrated data with Russia Post, reducing the parcel time from 50 days to 15 days.

A girl from Chile bought her father a watch as a gift at US$41.01 from Alibaba’s retail platform AliExpress on 10 April 2017. What she did not know is that she is recorded by Alibaba as the 100 millionth customer.

AliExpress.com is Alibaba’s cross-border B2C e-commerce platform with users from over 220 countries, with 60 million active buyers during the past 12 months. Its daily visitors are over 20 million.

Having reached the 100 millionths overseas buyer on AliExpress, Alibaba is upgrading Cainiao’s cross-border supply chain and logistics capabilities and management.

Cainiao, global parcel tracking platform of Alibaba Group, has integrated data with Russia Post, reducing the parcel time from 50 days to 15 days. Transaction values of Russian online buyers on China’s online platforms through Yandex increased by 30 times in 2015. In 2016, Chinese websites accounted for 52% of total cross-border trading e-commerce transactions in Russia.

Cainiao has also set up an overseas warehouse in Spain to achieve fast order fulfillment. A buyer in Madrid received his parcel after 5 hours of placing the order during a promotion in March 2017.

Delivery time from China to Chile has been reduced to 20 days from 45 days; and, time from China to Mexico and Columbia is reduced by half to 25 days.

Continue to read China online shopping market forecast 2017-2019

Tmall recently launched its virtual fitting room Mota (magic dressing), to provide users with virtual simulation sceneries as they shop on Tmall. It has attracted more than 130 brands on Mota including Topshop, GAP, Levi’s, etc.

Based on fitting algorithm and style recognition, Tmall Mota can help recommend unique style clothing to consumers, which in turn help reduce the return rate and improve store operation efficiency. Its June testing data showed that, the average spend per customer and the number ofcustomers were both higher than the store average.

In addition, Tmall would cooperate with Cainiao logistic network to promote the “daily delivery” service via the nearest corresponding offline stores.

Tmall was not the first to launch the virtual fitting room project. As early as 2014, Jingdong had begun to push the virtual fitting room. Users could take a picture of him or herself, and adjust the height, weight, shoulder and other parameters online to form a virtual image. By the end of last year, JD made cooperation with Intel, and implanted the Intel’s “real sensor technology” in the virtual dressing room.

Also read: Tmall Will Launch the Global Duty-free Shop Project in China

Recently, Alibaba announced that it would launch Tmall Supermarket across China in several stages. It would invest 1 billion yuan (US$160.78 million) targeting consumers in Beijing in the first phase.

Tmall Supermarket is like an online supermarket, focusing on FMCG products and was only available to consumers in Jiangsu, Zhejiang, and Shanghai with fast delivery and discounted price. After adding all products from Tmall Supermarket to shopping cart, they will be packaged together and send in one package.

Besides Alibaba, Jingdong and Yihaodian are also competing for the actual market share of offline supermarkets while offline commercial supermarket companies were on the transformation to the online market. For example, Wal-Mart acquired Yihaodian and launched O2O service platform.

Tmall Supermarket uses the same day delivery service of Cainiao network in Beijing. By late July, data showed that sales of Tmall Supermarket in Beijing region grew by 740% year over year, of which 90% transaction volume was from the mobile client.

However, most offline commercial supermarket companies were reluctant to cooperate with Jingdong or Alibaba. The storage and purchasing capacities of large online markets and advanced logistics had a powerful hit on offline traditional companies. This year, Tmall put forward many important initiatives, including the duty-free shop project in China partnering with Shilla Group and King Power, who were the largest duty-free groups in South Korea and Thailand respectively. Compared with Tmall global and other online supermarkets, offline supermarkets didn’t have more competitiveness.

Also read: China Online Shopping Accounted for over 10% of Total Retail in Q1 2015

Double 11 in 2013 created 152 million packages; and, in 2012, the number was 78 million. About 100,000 packages were created in one minute. It is a huge challenge for logistic companies.

CAINIAO, a logistic network owned by Alibaba Group, helped Chinese logistic companies to sort out packages more efficiently. In 2013, the packages sorted on November 11 hit 60 million, which was nearly twice of last year. CAINIAO sent out alerting signals about weather and transportation to related logistic companies and enterprises.

Some consumers even said they had received their packages on November 12, 2013.