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.

Online penetration in video entertainment grew by 4.2% to 71.3% in December. On average, 205.6 million users watched videos online daily. Tencent Video, iQiyi, and Youku were the top three players in this market.

Market penetration of online video was 71.3%, an increase of 4.2% year-on-year. Its average DAU declined to 205.6 million from 219.3 million a year ago.

Tencent Video topped the ranking with a penetration rate of 47.6%. iQyi took the next spot with a penetration of 43.6%. Youku (29.7%), Bilibili (8%), and MangoTV (7.7%) ranked in the third, fourth, and fifth position, respectively.

The average DAUs of Tencent Video increased to 120.7 million from 116 million three months ago. iQiyi’s average DAUs decreased to 82 million from 85.6 million three months ago.

Read more on top live streaming apps and short video apps.

Half the top ten apps that generated the most revenues from the Apple Store were from Chinese tech companies. Notably, all those apps turned out to provide some sorts of subscription services for video or music streaming and social interactions. 

Tencent-affiliated Tencent Video took the second position with a remarkable US$490.2 million in revenue. Baidu-backed iQiyi and Kwai (Kuaishou) ranked fourth and fifth with a revenue of US$420.5 million and US$264 million, respectively. Alibaba’s Youku and Tencent’s QQ made it up to the eighth and ninth places with a revenue of US$192.9 million and US$159.7 million, respectively.

Wondering the top mobile apps in China in Q3 2018?

iQiyi ranks on top in China’s mobile video category with 245.61 million active users in Feb 2017, followed by Tencent Video, Youku, Letv, and Mango TV.

Sohu TV, Baofeng, PPTV, Tudou, and Migu Video apps are also in the top 10 video apps by MAUs in Feb 2017. Bilibili Cartoon ranks first in the vertical digital video mobile apps category with 30.52 million active users, followed by Hanju TV (Korean drama), Migu Movie, AcFun, Renren Movie, 1905 Movie, etc.

CCTV mobile app is the top one in TV programs category, followed by Migu, Mobile TV, and Yuntu TV.

In the short videos category, Kuaishou mobile app ranks on top in China in Feb 2017 with over 86 million active users, followed by Meipai, Xiaokaxiu, Miaopai, and Doupai.

Douyu, Huya, Inke, YY Live, and Huajiao are the top 5 digital video broadcasting mobile apps by MAU in Feb 2017.

Case Studies: Native Video Ads on WeChat Moments

With rapid development of mobile internet, mobile and social features will play more and more important role. Among all the mobile apps in China in July 2015, social platforms like WeChat and QQ ranked first with the monthly average users of 556.48 million and 424.28 million respectively.

Among the top 20 mobile apps, those owned by Tencent, Alibaba, Baidu and 360 took the majority, especially Tencent. WeChat, QQ, QQ browser, Tencent Video, QQ Music, Tencent News, WeSync and WeSecure took up 40% of top 10 mobile apps. WeChat was the most active social platform with the monthly average users of 556.48 million; Baidu App was the most active mobile search engine with the monthly average users of 190.03 million. In the mobile video market, Tencent, iQIYI and Youku led the market, with fierce competition and close gap of MAUs (monthly active users); and see the top 20 mobile apps in July 2015 below.

Also read: China Mobile App Advertising Market in 2014

In October 2014, Youku mobile app’s daily UV exceeded 40 million in a single week and then it successfully broke through 40 million in October 2014. The total UV in a week reached 80 million which made new records in online video market in October 2014 in China according to data of iResearch.

The total effective usage time of Youku in the week (from 20th Oct to 27th Oct) was 16.88 billion minutes which is equivalent to 30 thousand years; and weekly access was 1.5 billion times which was 1.5 times more than iQiyi in Oct 2014.

What’s more, Youku app users exceeded 600 million recently in early December 2014 which indicates Youku will be the first mobile app to make such records in China online video market. Besides, its monthly coverage was over 500 million and daily UV was over 650 million in October in China. Total accumulated usage time of Youku was over 10,000 years per day in 2014.

In August 2014, with monthly browsing time of 775.515 million hours, Youku ranked top among China online video providers, followed by IQiYi and Letv. While during the first 7 months in 2014, iQiyi/PPS remained the leader by total number of reached users on mobile, followed by Youku Tudou, and Tencent video.

In TNS Connected Life study, it found that one third (33%) in mainland China, 32% in Hong Kong, watch online video every day, on either PC or mobile devices.

Also read: China Online Video Overview in Q3 2014

A smart TV device is either a television set with integrated Internet capabilities or a set-top box (STB) for television that offers more advanced computing ability and connectivity than a contemporary basic television set. Video is the main function for smart TV users. At present, game apps development are not so active as video ones.

The essential reasons can be as follows:

1. It is still unclear about how to pay for paid game apps.
2. It is hard to integrate different kinds of hardware (Television, STB).
3. Since smart STB is a new product, it still needs to be improved. There is limitation when a large game is running.

Compared with H2 2013, downloads of video apps on China smart TV decreased by 11.1%. With increase of smart TV users in the future, game developers are going to devote into more smart TV game apps. It is estimated that downloads will increase to 30% in 2 years.

In H1 2014, Downloads of education apps incresed by 1.3% from H2 2013. Online education market is on its early stage and its development on desktop and mobile device is not so popluar in China. Smart TV has its own advantage, big screen, large room in sitting room, so it is estimated education apps downloads will increase to 10%.

Video apps accounts for 55% in future smart TV apps, which shows they will still have great potential in smart TV app market.

With video sites’ standardization and operators’ enhanced awareness about copyright, paid video app is gradually accepted by users. As post-80s in China are concerned about educating their children, in the future, parents are willing to pay expenditure on education.

Games, education and video apps are top 3 ones, accounting for 75.1%.

Youku, iQiyi and 91VST were top three video on demand apps on China smart TV by total downloads in H1 2014.

In H1 2014, Togic ranked top among live TV video apps on China smart TV by total downloads, followed by Kantv and TVapk.

Also read: CHART: China Smartphone Mobile Gaming Users

In July 2014, iQiYi, owned by Baidu, ranked top among China online video providers with monthly browsing time of 786.45 million hours, followed by Youku and Letv according to data from iResearch.

In July, total number of iQiyi’s users on mobile device increased by 9.57% from June in 2014. It is estimated that the number of iQIYI’s total users will likely double by the end of 2014. In August, with monthly browsing time of 775.515 million hours, Youku ranked top among China online video providers, followed by IQiYi and Letv.

Besides iQiYi’s good performance in July and August 2014, Letv is also running on a good track as it is still in top 3 list by monthly browsing time whose CEO was awarded the Best CEO among China’s public listed companies in 2014 on Forbes.

Youku Tudou’s loss continued and Youku Tudou reached Over 500M Users in Q2 2014.

Also read: Top Mobile Video Providers in China in July 2014

The number of mobile video  users increased to 270 million in China in July 2014 with an increase of 134% from the same period in 2013.

The top three mobile video providers in China were iQiyi, Youku Tudou and Tencent video with total number reached users of 134 million, 129 million and 77.7 million respectively according to data from iResearch in July.

During the first 7 months in 2014, iQiyi/PPS remained the leader by total number of reached users on mobile, followed by Youku Tudou, and Tencent video. In July, total number of iQiyi’s users increased  by 9.57% from June in 2014. It is estimated that the number of iQIYI’s total users will likely double by the end of 2014.

Among China’s mobile video player apps in July 2014, Mobile QQ Video Player ranked first by total number of active users, with 867 thousand users, followed by MoboPlayer with 774 thousand according to EnfoDesk.

When it comes to factors that make China online users favor and stick with a specific video websites, “rich and broad content” rank on top, followed by video stream quality (definition) and loading speed. Read more here.

Also read: Top Mobile Browsers in China

Youku Tudou net revenues were RMB958.7 million (US$154.5 million), a 27% increase from the corresponding period in 2013. They derive a part of our revenues from mobile value-added services through partnership agreements with third party mobile network operators and shares the fees collected by the mobile network operators for such services.

Youku Tudou’s net loss was RMB164.4 million (US$26.5 million), a 57% increase from the corresponding period in 2013. Non-GAAP net loss was RMB75.9 million (US$12.2 million) in the second quarter of 2014, as compared to RMB44.6 million (US$7.2 million) from the corresponding period in 2013.

Multi-screen Internet is increasingly mainstream and the convergence of online and offline entertainment has presented new market opportunities. We are scaling our investment and leveraging our strengthened resources to enhance our business model,

said Victor Koo, Chairman and Chief Executive Officer of Youku Tudou.

Youku Tudou has helped transform how media and entertainment related content is distributed and marketed since our inception. Going forward, we will work with our online and offline partners to continue to change how content is created and monetized by directly connecting with the ever-growing consumer economy as Youku Tudou is best positioned in developing the leading multi-screen media and entertainment ecosystem in China.

Dele Liu, President and Board Director of Youku Tudou, added,

Our traffic has grown strongly this quarter with our user base reaching over 500 million on a monthly basis. We have made a smooth transition to multi-screen monetization with over 30% of revenues generated from mobile and solid progress on subscription services with 379% growth year on year. By partnering with Alibaba on big data initiatives, we are enhancing our products to create an unique value proposition to advertising partners and consumers. We are confident that our revenue will continue to diversify and grow.

Youku Tudou’s continued loss could be a concern for Alibaba Group who invested in Youku Tudou this April with 16.5% share. But with the rising development on mobile video market, more revenue could be expected on mobile.

For the third quarter of 2014, Youku Tudou expects net revenues will be between RMB1.09 billion and RMB1.13 billion, with advertising net revenues contributing between RMB965 million and RMB1.01 billion.

Source: Youku Tudou

Youku and Tudou officially announced that Alibaba and Yunfeng Capital (founded by Jack Ma and Yu Feng who is board director of Huayi Brothers) purchased Youku and Tudou’s A shares with $1.22 billion, Alibaba will hold 16.5% and Yufeng Capital holds 2%. Besides, Alibaba will appoint CEO Lu Zhaoxi as one of the board director of Youku and Tudou.

Youku and Tudou’s evaluation reached $6.6 billion, 10% to 15% higher than present market value. When the deal is finished, Gu Yongqiang and Chengwei Capital will have over 40% voting and Youku and Tudou management still have the dominant control.

Gu Yongqiang indicated that with Alibaba’s $1.22 billion, plus Youku and Tudou’s cash totaled 10 billion yuan. The $1.22 billion investment will be used in 4G mobile internet development, OTT technology and growing paid users and SME clients.

As for why choosing Alibaba to be its strategic partner, Gu Yongqiang explained it as follows:

• Alibaba could afford billion USD financing which help accelerating Youku and Tudou’s OTT, UGC and the whole video businesses development;
• Alibaba is a good supplement for Youku and Tudou. Youku and Tudou now has 400 million users, and its main revenue comes from large enterprises’ advertising. While Alibaba’s e-commerce businesses have accumulated advantages among consumers and SME, it could help Youku and Tudou in precision advertising for SME clients and charge its users.
• Multi-screen integration is one of Youku and Tudou’s strategy, Youku and Tudou’s mobile app, and Alibaba’s Alipay, Taobao, UC and Weibo all ranked top 10 in viewing time. The potential cooperation is wide in range.

Youku and Tudou realized profit for the first time in Q4 2013, with 44.2 million yuan (USD 7.17 million) net profit. However the net loss of 580.7 million yuan (USD 95.16 million) in 2013 made Youku and Tudou worried about high video royalties. The fierce competition with Sohu video, Tencent video and iQiyi led to the alliance with Alibaba, to guarantee its high quality video contents building and remain as market leader.

According to Enfodesk, in Q3 2013, China online video advertising revenue reached 3.25 billion yuan (USD 530 million), 13% more than Q2 2013 and 23.1% more than last year.

In Q3, online video websites played many TV series, talent shows and self-made drama, therefore average watching time and frequency all increased handsomely which in return drove the growth of advertising. In the meantime, mobile video advertising business value attracted more attention. Youku and iQiyi increased advertising revenue by prolonging pre-roll ads.

iResearch data showed that Youku dominated mobile video market with 14.12 million daily Unique Visitor(UV) in June 2013, more than the sum of iQiyi and PPS.

Also, Youku beated its competitors on monthly watching time, with 11.15 million mins.

Youku’s Visit View(VV) surpassed 100 million in the beginning of 2013, and hit 200 million recently. In PC, Youku’s VV reached 200 million, together Youku had 400 milion VV. What’s more, Youku won the love of users on mobile devices, which could tell from 1.3 billion monthy usage in June.

According to iReasearch, iQiyi and PPS together have more video viewing time than youku, tudou and funshion for the first time.

After the merger of Baidu’s iQiyi and PPS, the combined users reached 269,817,000 hours of the total viewing time, becoming the first in the industry with Youku & Tudou second and funshion third. However, on the other side, Funshion continued as a hefty lead by per capita online video viewing time in the industry.

For per capita online video viewing time, Funshion ranked first and its viewing time had reached 11, 044. 9 seconds per user, followed by iQiyi & PPS and PPLive.

Market Size: Stable Growth Overall; Diversified Sources of Income

Advertisement is still the main income source of online video industry. Meanwhile the industry is also seeking for diversification in the business model, supplying several premium services including E-commerce, video show and video-on-demand, etc. Video industry is in pursuit of content differentiation.

Advertising Market Scale: Consolidation Continued,  Advertising Revenue Integration Becoming More Obvious

The advertisers’ income falls after rise in the first quarter quarterly, and the advertising market scale has reached 1.74 billion yuan, up 47.9% by year-on-year growth. With intensified integration in video industry, the convergence of video platform becomes more obvious in both user size and revenue. On the other side, the value of video media receives acceptance and acknowledgment continuously.

PC Structure: The Use Duration of Website Share Is Increasing

After the fourth quarter of 2012, online video playing on the website experienced longer time than the client side, and this gap is widening further in the first quarter.
The video industry consolidation continues. Some video companies cannot make quick adjustment due to capital market factor or other, which leads to slowed traffic growth.

Mobile Video: Advertiser Market Needs To Be Universal

Types of advertisers are  slightly different in PC and mobile. Brand advertisers have realized the great value of mobile video, and the number of advertisers in food and beverage, traffic and IT product also rank a lot higher.

In the first quarter of 2013, competition in China online video industry became more intense. Maintaining and pursuing the market share, online video platforms expanding in multi-device support such as on mobile and television, are becoming one main direction in current video industry.

According to iResearch, the trend of merger and acquisition in video industry will continue. After Youku and Tudou, several video media have the opportunity to compete for the second in the industry. Merger is the fastest way to take the second position.