Every business has its own mission, something to do alive.

In 1999, when Ma Yun founded Alibaba, his mission was to “let the world have no difficult business.” At that time, many people felt that Ma Yun was like a “liar”, and he shouted slogans too much, so that everyone couldn’t understand it, which was quite unreliable-I let you do business with you. Why would a business be better?

During the Spring Festival of 2020, affected by the epidemic, China ’s retail industry suffered a cold spell. On the evening of February 13, Ali leaped ahead of all Internet giants and released the third quarter of fiscal 2020 (the fourth quarter of the natural year 2019) This is also the first financial report after its listing on the Hong Kong stock market, which has attracted the attention of Chinese investors.

Let ’s take a look, Alibaba is determined to make it easier for the world to do business. How is your business doing?

Core e-commerce has been delayed for three times, and 4 highlights support the financial report

In terms of overall performance, Ali ’s performance is beyond expectations. In the reporting period, operating income was 161.456 billion yuan, an increase of 38% year-on-year. Monthly active users have a net increase of 39 million in a single quarter.

In terms of Alibaba’s volume, the 38% increase in revenue is already good enough, and if you break down its business to break it down, you may see more.

As one of the Chinese Internet giants, Alibaba’s business lines are complex and can be divided into four major sectors-core e-commerce, cloud computing, digital media and entertainment, innovation and others.

Among them, core e-commerce accounted for 88% of revenue and cloud computing accounted for 7%.Digital media and entertainment (big entertainment) accounted for 5%, and innovation business accounted for 1%, so from this perspective, Ali’s performance ultimately depends on the core e-commerce part.

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The so-called core e-commerce companies include Taobao and Tmall (domestic toC e-commerce platform), toB’s e-commerce platform 1688.com, AliExpress for overseas consumers, and acquired overseas e-commerce LAZADA .

Apart from the core e-commerce, cloud computing and big entertainment are very early in Ali’s layout. Although they are not a large proportion and they are all loss-making, they are also already the first level in their respective fields.

Ma Yun once said that Ali’s life is 102 years and it spans three centuries. According to this calculation, Ali, who is only 20 years old, is still an energetic young man. Of course, like other giants in the rising period, he is on a “standard” development path-the main business is responsible for making money, the ecological business is responsible for guerrilla and sniper, and the new business is betting on the future.

So, if you want to understand Ali’s financial report in detail, you must break down what areas it does well.

First, the biggest highlight comes from Taobao Live.

As of December 2019, monthly active users who watch Taobao Live and GMV driven by Taobao Live have both more than doubled year-on-year.

Secondly, the rookie has developed rapidly.

In the reporting period, revenue increased by 67% to 7.5 billion yuan. Revenue from local living services (including Hungry and Word of mouth) increased by 47% to 7.548 billion yuan, all growing faster than the previous quarter.

Why both? Because this is Ali’s base camp and the part on which he depends.

Then cloud computing business made breakthroughsincrease.

During the reporting period, cloud computing business revenue was 10.721 billion yuan, which exceeded the 10 billion yuan revenue for the first time in a single quarter, a year-on-year increase of 62%, compared with 37% of Amazon AWS and 27% of Microsoft’s intelligent cloud business. The loss rate was 3%, which was 1% lower than the same period last year, and it was in a narrowing state.

Finally, the market is sinking.

According to the financial report, in the fourth quarter of 2019 (the natural year), Alibaba Mobile’s monthly active users have a net increase of 39 million in a single quarter, and China’s retail market has an annual active consumer of 711 million, an increase of 18 million over the first three quarters, of which 60% of new annual active consumers come from less developed regions.

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Abandoned big entertainment?

Of the four major sections of the Ali business empire, there is a very special section-digital media and entertainment, which is what we usually call Ali entertainment. It is between the “old generation” and “new generation”. In the past A few years of performance has been very “spicy eyes”, and in this financial report, we also saw some other “signals”.

Alibaba Entertainment mainly includes Youku Tudou and UC Browser, but it has been in a huge loss in recent years. In Q4 of 2018, it lost 6.03 billion yuan, and the loss rate reached 93%. In 2018, the total loss in the natural year reached 15.56 billion yuan.

In Q4 of 2019, its loss was 3.298 billion. Although the loss margin narrowed to 45%, the reason was that Ali reduced the content expenditure, which led to cost reduction, so the loss also decreased.

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In other words, I just do n’t want to continue to burn money on entertainment.

So, was Youku abandoned?

Although Ali CEO Zhang Yong once said: Ali’s entry into big entertainment does not want to do another profitable business, but for 600 million and 700 million users, after the material life is getting richer, the spiritual products are very Importantly, this is our original intention to enter the big entertainment.

So, will Ali burn more than 10 billion yuan each year to do public welfare to enrich everyone’s spiritual life?

In the view of Mantis Finance, reducing the investment in content is clearly in conflict with the original intention of enriching spiritual products. Compared with Tencent Video and iQiyi, both are racing to burn money to attack the city, this is undoubtedly a kind of shrinking battlefield behavior.

The big entertainment sector, has always been awkward in Ali’s business empire. The strategy, architecture, and leadership have undergone many adjustments. It can be said that it is the most unpredictable sector in the Alibaba system. .

In 2019, there have been rumors in the market that Ali Sami Music will be merged with Netease Cloud Music. At the same time, short videos are in the ascendant. Byte Beat is intentionally entering the long video. During the Spring Festival, “Mom” was moved to the line Free live streaming, which has given Youku a lot of pressure.

Combined with Ali ’s recent actions, even if the direction of cooperation between big entertainment and core business is still the same, but Ali is clearly reviewing its efficiency and loss issues. From this Q4 financial report, Ali A business that contributes little to such financial reports and has a great negative impact has already begun to reduce the scale of burning money in large numbers, and the future is worrying.

Then its role may be more inclined in the followingStrategy pieces.

Because on the one hand, e-commerce is a field that needs traffic, so it is willing to build a traffic moat. Dawen Entertainment is undoubtedly a part of it. For example, the 88VIP package includes Youku’s VIP.

On the other hand, throughout the development of the history of the Internet, giants have always controlled the leading direction of the entire industry. Take Ali and Tencent as examples. The two heroes have been fighting for years, and there are not many opportunities to go down the battlefield in person. It started between the agents. Tencent has a Tencent video. Ali ca n’t live without it. When it ’s younger, it ’s “you ca n’t kill you.” When it ’s older, it ’s a strategic problem. You ca n’t give your opponent a sneak attack on Pearl Harbor. Opportunity.

What is the impact of the epidemic on Ali?

In the prospect of Ali, the impact of the epidemic is definitely the first consideration. In this shock, it can be divided into three parts to discuss.

The first part is direct loss.

After the outbreak, Alibaba introduced 16 free subsidies and 6 major subsidies, the most important of which is the reduction and exemption of platform business operating expenses. For example, for all Tmall merchants, the annual platform service fee for the first half of 2020 is waived.

According to the calculation of Huaxing Capital, if the average annual fee of an average merchant is 35,000 and Tmall’s 250,000 merchants, this measure will cause Ali to lose 4.375 billion yuan in the first half of the year.

The second part is the impact on the main business, that is, e-commerce and takeaway services that account for 88% of the total.

E-commerce is basically stopped during the Spring Festival, and many people’s orders are still undelivered because the supply side and logistics side have been damaged.

On the supply side, the lack of online supplier capabilities, and offline restaurants and retail shutdowns, the resumption time and requirements vary from place to place, which has directly caused a lack of supply side. In terms of logistics, the courier generally resumes work late and the recovery of capacity is slow. As of February 14, less than 40% of the courier has been restored, and priority must be given to protecting the epidemic area.

According to the conservative forecast of CITIC Construction Investment, the working day in the first quarter of 2020 will be reduced by 20%, and it will be transmitted to the courier side, due to the impact of changes in the epidemic situation and different local control efforts.Will be bigger.

The third part is new business.

The so-called new business refers to cloud computing, new retail, big entertainment, Internet healthcare, cloud office and other businesses that have made less contribution in the financial report. The epidemic may not have obvious revenue effects, but the business promotion As a result, their demand has increased significantly.

For example, Dingding surpassed WeChat to become the number one in Apple’s free AppStore. The DAU of Hema Fresh App during the Spring Festival increased by 127.5% year-on-year. In the first week of February, Hema Shenzhen, Chengdu and other places reached orders Usually 5-10 times.

Of course, all three of these are short-term effects.

In the long run, consumer demand for e-commerce and takeaway is only postponed and suppressed, but it has not disappeared. As the epidemic eases, the suppressed purchase demand will also be released again. New businesses such as cloud computing, new retail, big entertainment, Internet healthcare, and cloud office are already in the phase of habit cultivation and popularization, and are far from reaching the ceiling. Therefore, in the long run, the promotion effect is greater than the actual revenue contribution.

Taking fresh e-commerce as an example, the current market scale of our country has reached 4.9 trillion yuan, and the scale of fresh e-commerce has exceeded 200 billion yuan, with many players. This epidemic is an excellent opportunity to accelerate the reshuffle. Ali The Hema brand under its flagship “Go to Store + Home” model, relying on offline stores, users can either place orders online or purchase from stores. After the epidemic, consumers ’fresh shopping habits will accelerate from farmers’ markets to supermarket chains and Fresh e-commerce changes.

These have a small impact on Ali’s short-term performance, but they can promote long-term ecology.

At the capital level, direct losses and the impact of the main business will reduce Ali’s revenue, but also increase costs and reduce profits. Its next quarter’s performance may be lower than Wall Street expectations, and stock prices are under pressure. But in the long run, the future growth potential has been strengthened.

Well? Fuxi?

What will Alibaba do in the next business? The impact on the business will take time to verify.