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3) Goal: To be a good company

If there is a family, the first situation is that all four children work in the Fortune Global 500, each with an annual salary of 1 million yuan; the second situation is that the eldest son ’s business is successful and earns 5 million annually. For the study of a doctor and some teachers, the family should subsidize them by 1 million every year. Let investors judge that the second option is more likely.

Looking at the revenue and profits of the four major businesses, it can be seen that Ali’s strategy is to maintain growth, focus on efficiency, and not miss opportunities.

Ali has gone beyond the stage of pursuing “big” and “fast”. In his resignation speech last year, Ma went on to say “Ali’s future goal is a good company.”

Core business layout

Alibaba ’s core business is composed of six major sectors: Chinese retail, cross-border retail, Chinese wholesale, cross-border wholesale, rookie logistics services, and local life services.

Chinese retail is the core of the core, with revenue of 332.75 billion in fiscal 2020, accounting for 76.3% of core business revenue; international retail revenue of 24.3 billion, accounting for 5.6% of core business revenue. In other words, 81.9% of Ali’s core business revenue comes from retail business.

Chinese wholesale and international wholesale are Ali ’s traditional businesses, with revenues of 12.4 billion and 9.6 billion in fiscal year 2020, which together accounted for 5% of core business revenue.

Cainiao logistics services and local life services are rising stars, with revenues of 22.2 billion in fiscal 2020 ( 49.4% year-on-year growth ) and 25.4 billion ( up 40.9% year-on-year ), which together accounted for 10.9% of revenue. With a growth rate of nearly 50%, Cainiao has become the fastest growing business among core businesses.

The epidemic disrupted the growth rhythm of rookie and local life services, but the actual situation is much stronger than humans imagine. In Q1 2020, local life services achieved revenue of 4.8 billion, a year-on-year decrease of 8.1%; rookie revenue also increased by 28.2%.

In 2020, Alibaba ’s core business will have 960 million active consumers worldwide, of which 780 million will come from China and 180 million from overseas.

Jianghu has a solid status

Ali’s “total plate” can be roughly summarized as: 7 trillion GMV, 730 million annual active users, and 500 billion revenue.

1) Two billion products and their sellers

Retail in China is the “base camp” of Alibaba’s core businesses, including Taobao, Tmall, New Retail and Alibaba Health. After 20 years of development, Chinese retail has become an ecosystem that gathers millions of sellers, owns 2 billion products, and has an annual turnover of nearly 1 trillion dollars.

Ali China Retail provides more than 2 billion products and services to consumers. Sellers include millions of individuals, small and micro businesses, and 190,000 brand merchants ( 77% of the Forbes Global 100 Brands have settled in ).

In the face of tens of millions of sellers and billions of commodities, the e-commerce platform must provide complete services ( Product display, marketing, sales, payment, after-sales ) and we must constantly go to the truth, maintain a fair business environment, and protect consumer interests.

As the saying goes, “Broken a person’s wealth is like killing a parent”, the platform is strictly controlled, and the seller’s immediate benefits will inevitably be lost. It is no exaggeration to say that this is a fight with human nature, a fight is twenty years.

Alibaba e-commerce platform also “mobilizes the masses” to allow users to truly participate in the supervision of businesses. Consumers evaluate whether the product matches the description, delivery speed, and after-sales service. These evaluations determine the seller’s credit rating and are included in the search algorithm. At the same time, consumers’ shopping on the platform and evaluation behavior can also enhance their own credit rating.

Alibaba ’s core ability is to manage billions of products and their sellers. Commodities are abundant, and the quality supervision mechanism is gradually improved. Hundreds of millions of consumers are “uninvited”, which is called their own traffic ( organic traffic ) . In March 2019, Ali China’s retail platform reached 250 million daily users.

Internet companies are doing traffic business. Ali, Tencent, Baidu, Meituan, Xiaomi, and Toutiao are able to make a splash, the fundamental reason is to obtain abundant private traffic in their own way. If you need to “purchase” traffic at a high cost, after all, it is to work for others.