“I don’t feel bad about online shopping at work. It is the only place you spend money while you make it.” – Anonymous.
What is Alibaba?
Alibaba is the world’s largest retailer and e-commerce company. Founded in 1999, the company provides consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business (B2B) sales services via web portals. They also provide electronic payment services, Entertainment services, Health services, Internet services, shopping search engines, and cloud computing services.
Alibaba Group Holding has three major shopping sites.
- TMall.com (B2C)
- Alibaba.com (B2B)
- Taobao.com (C2C)
Alibaba makes its money through setup fees, payment processing fees, sales commission and charging sellers for optional delivery/supply-chain/logistics/warehousing/online marketing services, plust more.
In addition to its e-commerce division, Alibaba has Alipay, which facilitates online transactions. Quite new, yet highly growing, to its core business, is its cloud-computing and AI.
Key Stats
Alibaba pretty much sells everything that is sellable. Alibaba retail marketplace has over 1.5 billion listings.
Here are other key facts about it.
- 617 million mobile MAUs.
- 552 million annual active customers.
- 150,000 brands on Tmall.
TMall.com, Alibaba.com and Taobao.com are in top 10 most visited sites in the world. (Check here)
They provide unmatched customer service. Alibaba’s core focus is in the following areas.
- Brand Selection
- Convenience
- Engaging, Personalized experience
- Value for money
- Merchant quality
- Authentic Product
80% of China’s online shopping market is dominated by Alibaba.
Future Growth
In FY 2018, Alibaba reported $39.8 billion revenue. Majority of it comes from its core commerce division.
| ($, Billion) | FY18 |
| Total Core Commerce | 34.1 |
| Cloud Computing | 2.1 |
| Digital Media | 3.1 |
| Innovation Initiaves | 0.5 |
| Total Sales | 39.8 |
A customer of 5 years placed an average of 132 orders in 23 product categories with average spending of RMB (Renminbi – Chinese Currency) 12,000 = ~ $1,790.
A customer of 1 year placed an average of 27 orders in 6 product categories with average spending of RMB 3,000 = ~ $450.
In average customers placed an average of 90 orders in 16 product categories with average spending of RMB 9,000 = ~ $1,345.
Cloud computing grew at 100% rate from last year. And it will continue to be a high growth division for Alibaba.
This leaves a lot of room to grow. The new customers still have around $1,000 more to spend as they get used to the new convenience.
More than half of the Chinese are yet to be customers of Alibaba. China is home to 1.38 billion people and Alibaba has only 552 million active customers.
According to Statista, Online shoppers in China are expected to reach 931.8 million in 2022.
Managers
The mastermind behind Alibaba is Jack Ma. Jack Ma has stepped down as CEO but still has a huge influence on the company’s major decision and operation. Jack owns 7.8 percent of the company.
I just finished reading Jack Ma’s incredible story about founding Alibaba.
Softbank and Yahoo are the largest owner of Alibaba. They own more than 50% of Alibaba.
Daniel Yong ZHANG is the CEO of the company. Daniel has worked in Taobao as Chief Operating Officer and in Tmall as President. He has a wider operational knowledge. Alibaba’s blood flows through his vein and he seems a right person to lead the company.
Cont’d… in next post.
Full Detail (Alibaba Group Annual Reports)
Disclaimer – Long position.
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Arrow of Performance 
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