Alibaba Q4 and full-year results: International retail quarterly revenue increased by 41%, Cainiao quarterly revenue increased by 18%

On the evening of May 18, Alibaba Group announced its fourth quarter and full-year results for fiscal year 2023 (first quarter of natural year 2023). From January to March 2023, the Group made steady progress , with revenue growing steadily by 2% year-on-year, in line with market expectations; quarterly adjusted EBITA grew by 60% year-on-year, better than market expectations.

Thanks to long-term capacity building and efficiency improvement, the quarterly and annual revenue growth of the International Business Division, Cainiao, and Local Life Division has been significant in the economic recovery cycle. Alibaba Cloud released its self-developed large model "Tongyi Qianwen" to build a healthier and more sustainable growth momentum for long-term development.

In addition, the financial report announced that the Cloud Intelligence Group will be completely separated from the Alibaba Group and go public independently, Cainiao and Hema have launched their listing plans, Alibaba International Digital Business Group has initiated external financing, and the six major business groups have formally established their boards of directors.

“As the world becomes increasingly complex, we are proactively implementing organizational changes to give our businesses greater independence to enhance their competitiveness, meet the evolving needs of different customers, and capture new market opportunities,” said Daniel Zhang, Chairman and CEO of Alibaba Group. “We are taking concrete steps to unlock the value of our businesses and are pleased to announce that the Alibaba Group Board of Directors has approved the spin-off of Cloud Intelligence Group through a dividend to shareholders, in order to pursue its goal of becoming an independent, public company.”

Taobao and Tmall's online physical GMV growth turned positive in March, and will continue to firmly adhere to the "user first" policy in the future

Data from the National Bureau of Statistics show that domestic consumption showed a steady recovery in the first quarter of this year, with catering consumption growing faster than commodity consumption. As a result, local life service orders increased by more than 20% this quarter. Among them, orders for the "to-destination" business of AutoNavi and Fliggy grew rapidly year-on-year. In March, AutoNavi's average daily number of active users hit a new high of 150 million, and the value of Fliggy's domestic hotel bookings increased by more than 70% compared with the same period in 2019. In the "home delivery" business, improved consumer demand, an increase in the number of active merchants, and effective expansion of delivery capabilities have significantly increased Ele.me's GMV growth and order growth.

China's commercial business quickly stabilized during the recovery cycle with a solid high-quality consumer group. In March, Taobao and Tmall's online physical goods GMV growth (excluding unpaid orders) turned positive, and the financial report showed strong growth in the apparel and health care products categories.

This quarter, the payment GMV generated by M2C products on Taobao and Taote increased by 26% year-on-year. Taocaicai continues to drive the category penetration of groceries and fresh products in the Chinese retail market. As of the 12 months ending March 31, 2023, 62% of Taocaicai's annual active consumers were consumers who purchased fresh products on the Alibaba platform for the first time.

While the performance is stable, the business operation efficiency is still improving. The financial report shows that this quarter, Hema continued to strengthen its sales capabilities and improve its operating efficiency; the unit economic benefits of each order of Ele.me continued to be positive and improved year-on-year; Taote and Taocaicai both continued to achieve a year-on-year narrowing of quarterly losses.

Last year, Taobao Tmall established the strategic direction of "moving from transaction to consumption", focusing on the construction of medium- and long-term development capabilities such as content, price power and contract fulfillment, with the user as the center, and the results are gradually showing. At this year's Taobao Tmall 618 Merchant Conference, Dai Shan, CEO of Taotian Group, said that the future direction of Taobao Tmall is: user first, ecological prosperity, and technology-driven, that is, promoting comprehensive content, supporting merchant development to reduce merchant operating costs, and creating new user products and merchant tools in the AI ​​era.

International business, Cainiao, and local life sectors have become new engines of performance growth

Overseas e-commerce business continued to maintain strong momentum. During the quarter, the overall order volume of international retail businesses including Lazada, AliExpress, Trendyol and Daraz increased by 15% year-on-year, and revenue increased by 41% year-on-year.

By optimizing the buyer experience, Lazada achieved double-digit year-on-year order growth in the Southeast Asian market and continued to expand its buyer base; Trendyol's quarterly year-on-year order growth rate remained resilient due to business resumption since March and strong growth in new business orders.

This quarter, AliExpress launched a new service, Choice, for global consumers. Consumers in designated countries can enjoy free shipping, free returns, and delivery quality assurance when placing orders on Choice. Since its launch, Choice's daily order volume has grown rapidly, driving AliExpress' quarterly orders to achieve double-digit growth.

Data shows that since March, the number of orders on AliExpress has grown rapidly, with a year-on-year increase of more than 50%. At the same time, in many countries where Choice services are available, such as South Korea and Spain, the number of downloads on AliExpress has soared to the top three. The rapid growth of orders has also put higher demands on warehouses and logistics capabilities. In May, AliExpress and Cainiao announced that they would open 5 new cross-border warehouses within a month, and the total area of ​​the preferred warehouses would increase by tens of thousands of square meters to provide more warehouse space for merchants.

Cainiao insists on long-term investment and construction, and its core capabilities in serving customers are constantly improving, providing strong impetus for performance growth. This quarter, after offsetting the impact of cross-division transactions, Cainiao's revenue increased by 18% year-on-year to RMB 13.619 billion. Cainiao continues to advance and make significant progress in the construction of key logistics capabilities that affect the experience, such as international end-to-end fulfillment networks and domestic home delivery.

In March this year, Cainiao became the first global logistics partner of the United Nations World Food Programme (WFP) in China. Through this cooperation, Cainiao will help WFP shorten the delivery time of key supplies in global emergencies. In China, the volume of home delivery packages of Cainiao Post Station increased by 85% year-on-year, and proposed a new service standard of "1-minute ultra-fast pickup, self-service pickup before 24:00".

Alibaba's different businesses have significant synergies, which have also contributed to new growth points for the company. The financial report shows that in the March quarter, the revenue growth rates of international business, Cainiao, and local life services were 29%, 18%, and 17%, respectively; even in the complex and changing market situation and many uncertain factors in fiscal year 2023, the three businesses achieved annual revenue growth rates of 13%, 21%, and 12%, gradually becoming a new engine for Alibaba's steady growth.

Alibaba Cloud has achieved profitability for the second consecutive year and has deployed AI to build sustainable growth momentum

In fiscal year 2023, after offsetting the impact of cross-division transactions, the cloud business had revenue of RMB 77.203 billion and adjusted EBITA of RMB 1.422 billion, a year-on-year increase of 24%, achieving profitability for the second consecutive year.

Alibaba Cloud has been committed to the research and development of cloud computing, big data and artificial intelligence (AI) core technologies, and has promoted the development of computing power and artificial intelligence. In April this year, Alibaba Cloud released the AI ​​big model Tongyi Qianwen and announced that it would be connected to all Alibaba products for comprehensive upgrades and transformations. Data shows that more than 200,000 companies have applied to access the Tongyi Qianwen test, and the demand for enterprise-specific big models is very hot.

DingTalk released an intelligent function product integration based on the Tongyi Qianwen big model. Users can invoke more than 10 AI capabilities such as article creation, image generation, and robot training by entering the slash symbol (/) in DingTalk.

Since the beginning of this year, Alibaba Cloud has turned from defense to offense, launched price cuts and free trial plans for core products, significantly increased partner commission rates, expanded the public cloud customer base, and increased cloud utilization. The financial report stated that these multiple initiatives will drive Alibaba Cloud's long-term healthy and sustainable growth.

According to Gartner's 2022 Global Cloud Computing IaaS Market Ranking, Alibaba Cloud ranks third in the world and first in the Asia-Pacific market. Currently, Alibaba Cloud operates 86 availability zones in 28 geographic regions around the world, serving more than 4 million customers worldwide.

While actively planning for the future, Alibaba continues to implement its share repurchase plan. The financial report shows that as of the quarter ended March 31, it repurchased approximately 21.5 million American depositary shares (equivalent to approximately 172.4 million common shares) for approximately US$1.9 billion. Under the current authorization, there is a repurchase quota of approximately US$19.4 billion, which is valid until March 2025.

Alibaba