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Alibaba Group released its financial report for the quarter ended September 30, 2023. Overall, it has delivered a robust performance over the past quarter, with a revenue of $30,810 million, representing 9% year-over-year growth, along with a healthy growth in Adjusted EBITA – $5,872 million, a 18% year-on-year increase – driven by revenue growth and improved operating efficiency.
Taobao and Tmall Group continue to be the largest revenue contributor, while Alibaba International Digital Commerce Group, or Alibaba International, exhibits the fastest growth rate among all six major business groups.
During his first earnings call as CEO of Alibaba Group, Eddie Wu outlined the three key priorities for Alibaba Group’s next decade: technology-driven internet platform businesses, AI-driven technology businesses, and global commerce network. He then delved into the strategy for the global commerce network, which is built on three pillars:
• Alibaba Group will accelerate efforts to establish a world-leading digitalized supply chain network by leveraging multiple world-leading merchandise centers and a high-efficiency logistics network that covers major international markets.
• Alibaba Group will develop world-leading AI and overseas digital retail technologies to drive efficiency enhancements and user experience innovations across platforms and regional markets.
• Alibaba Group will achieve breakthroughs in key emerging regional markets in the next few years by scaling up investment in selected high-potential regional markets and capitalizing on highly certain growth opportunities.
Jiang Fan Announced Three Key Factors that Contributed to Alibaba International’s Sustained Growth
During the September quarter, the total revenue from Alibaba International, increased by 53% year-over-year. Wholesale business shows steady performance, with a 9% year-on-year increase in revenue, while the retail business grows at a faster speed – an astonishing 73%. The combined order growth of Alibaba International’s retail businesses was approximately 28% year-over-year, driven by solid performance from all major retail platforms.
Pandaily learnt that on the earnings call, CEO of Alibaba International, Jiang Fan, attributed the positive growth to three major factors:
• The launch of “Choice”, the 1P model launched by AliExpress early this year that offers benefits such as free shipping, free returns and quality delivery guarantees, has improved the business model and supply chain services for AliExpress, providing better control of product selection and quality, faster logistics, and enhanced consumer experience. Working with Cainiao Smart Logistics, Choice offers services such as 3-5 day delivery globally, free shipping, and hassle-free returns. The program has been successful in South Korea and has now been expanded to Spain, the UK, Belgium, and other European countries.”In a few more quarters from now, Choice will account for more than 50% of the number of orders at AliExpress,” said Jiang Fan, CEO of Alibaba International.
• Alibaba.com launched new AI-based digital products for foreign trade, showcasing its commitment to product technology innovation. The AI products are integrated throughout the entire foreign trade value chain, including smart merchandise launch and management, market analysis, customer interaction, and real-time translation for video chats. These products help merchants export their goods to global markets more efficiently and achieve higher operating efficiency with certainty.
• Alibaba International has also achieved shared growth in different regional markets worldwide, with Lazada’s robust double-digit order growth in Southeast Asia and Trendyol’s expansion in Turkey and the surrounding region. In South Korea, AliExpress rose to one of the top three mainstream e-commerce platforms in just six months. In Germany, Alibaba.com recently acquired a leading local B2B platform, “Visible,” and will now operate with dual brands in Europe and conduct business through multiple B2B digital trade platforms, further promoting Alibaba International’s global expansion.
AliExpress (Source: https://www.alibabagroup.com)
During the earnings call, Jiang Fan also briefly discussed Alibaba International’s future development strategy, stating, “We will actively invest in these areas to achieve growth. The mission of Alibaba International is to help global SMEs engage in digital trade. In the future, we will continue to create long-term value for global merchants and consumers through product and technology innovation and consumer service upgrades, and we will continue to support merchants in achieving sustained business growth on our platform.”
The business landscape of Alibaba International can be roughly divided into two parts: the wholesale business, represented by Alibaba.com, and the retail business, composed of a number of platforms including Lazada, AliExpress, Trendyol, Daraz, and Miravia.
Since Alibaba‘s organizational restructure in March this year, Alibaba International has attracted abundant attention with its remakably rapid growth under the leadership of Jiang Fan. Since Q4 2022, Alibaba International’s retail business has been soaring, maintaining double-digit year-on-year growth, and the rate has been rising ever more rapidly. In the first three quarters of this year, the year-on-year growth rates were 41%, 60%, and 73% respectively.
In the first three quarters of this year, Alibaba International’s adjusted EBITA losses were RMB 2.33 billion, RMB 420 million, and RMB 384 million respectively. The amount of losses in September quarter has significantly narrowed, with a year-on-year decrease of 49% compared to the same period last year.
In addition to the AI products launched by Alibaba.com, Pandaily previously reported that Alibaba International has recently introduced an AI-powered suite “Aidge” that aims to enhance the efficiency of the trading process globally.
SEE ALSO: Alibaba International Launches ‘Aidge’, an AI Suite to Enhance Global Commerce Operations
Built on a self-developed large language model and computer visions, Aidge is positioned on the PaaS platform and is open for testing applications to global SaaS and ISV providers. It supports 18 languages currently and helps merchants quickly generate localized graphics, text, and videos for design and marketing purposes, thereby improving order conversion efficiency.
According to Alibaba International, Aidge has rolled out its services to merchants on its own e-commerce platforms, and intends to serve more SMEs through collaborations with business partners. It is currently inviting SaaS partners and ISVs to participate. The official website (www.aidc-ai.com) is open for pilot-testing applications and a staged rollout by region is anticipated by the end of this year.
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