There’s just one question on everyone’s mind about Alibaba, from VCs, investors, business partners and market watchers to e-commerce, logistics, payment services, clients and competitors around the world. Like Amazon, how far can it go and how big can Alibaba grow? Will the magic last?
Today, the answer is as big as it wants to be, in every niche it chooses and so far, in whatever market it has the inspiration and the appetite to test and invest. Our roundup today looks at the many faces of Alibaba’s business, where it’s innovating, investing and growing. You may want to buckle your seat belt.
A new book Alibaba: The House that Jack Ma Built tells the story of Jack Ma and his creation. Alibaba looks set to report improved fiscal 4Q financials rising by a third to RMB23.2 billion ($3.6 billion). Alibaba agreed to purchase a controlling stake in SE Asian retailer Lazada Group for $1 billion. Alibaba’s investment keeps money-losing Lazada alive after it lost $233 million despite revenue of $191 million. Alibaba surpasses Walmart as the world’s biggest retailer with sales of $476 billion. Subsidiary AliExpress is now delivering more than 40,000 products per month in India.
Consumers and e-commerce companies are concerned and confused about higher taxes and new regulations prohibiting sales of some cross-border goods. Singapore social networking firm YuuZoo Corporation and Alibaba launched a new esports venture. Alibaba joined the International AntiCounterfeiting Coalition in an effort to clean up the sale of counterfeit goods online. Alibaba Cloud — used “Ai,” its artificial intelligence program to correctly predict the winners during the four-hour finale of Hunan TV’s “I Am a Singer.”
Author Duncan Clark on how a former English teacher built one of the world’s largest e-commerce companies
One man that’s been there since the company’s humble beginnings is Duncan Clark, the head of BDA China, an investment advisory firm based in Beijing. He has a new book out called “Alibaba: The House that Jack Ma Built.” Via marketplace.org
Will Alibaba’s earnings provide the next catalyst for its recovering share price?
Alibaba is set to report a jump in revenue and earnings when it reports its fiscal fourth-quarter results on 6 May, driven by the growth of its mobile services. The Chinese internet giant is expected to report earnings per share (EPS) of CNY3.56 ($0.55) for the three months to end-March, compared with RMB1.12 ($0.17) a year earlier, while revenue is expected to rise by a third to RMB23.2 billion ($3.6 billion).
One of the company’s most impressive developments has been its ability to dramatically grow mobile monetization, with mobile GMV growing 98.3% from a year ago in its third-quarter results. This, of course, has also reflected a general trend in China towards greater mobile internet usage. Desktop GMV has been relatively steady over the past four quarters while mobile GMV has grown dramatically.
The other bright spot for the online marketplace operator has been its ability to increase monetization by improving fill-rates, moving large brands onto the Alibaba platform, and through new value-added services. Via ig.com
BABA Stock: This Deal Could Be Big for Alibaba Group Holding Ltd (NYSE:BABA)
Alibaba Group Holding Ltd (NYSE:BABA) stock is down about 15% since its initial public offering (IPO), but its latest move may turn its fortune around. The Chinese e-commerce giant is now trying to become a global giant by betting big on Southeast Asia. That could be huge for BABA stock.
On Tuesday, Alibaba announced that it has agreed to purchase a controlling stake in Southeast Asian retailer Lazada Group for $1.0 billion. Lazada operates online retail stores in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
This is Alibaba’s largest acquisition ever, and it gives the company access to a large and growing consumer base outside of China, where most of its revenue comes from. The stake in Lazada is also a claim to revenue that more than doubled in 2014, up to $154.3 million.
Alibaba will pay $500 million for new shares in Lazada, while the remaining $500 million will purchase an equal amount from each of the existing investors, including Germany’s Rocket Internet SE, British supermarket chain Tesco PLC, and Investment AB Kinnevik. Via profitconfidential.com
Alibaba’s $1B investment came just in time for cash-strapped Lazada
It’s hard to call a billion-dollar investment in an emerging market anything more than a major win, but for Lazada, the Rocket Internet-backed e-commerce firm in Southeast Asia, there’s more than an element of relief. The four-year-old company nearly ran out of money right before Alibaba swooped in with a majority investment, including $500 million in fresh capital and the acquisition of $500 million in stock from existing investors.
Lazada has long been billed the Amazon or Alibaba of Southeast Asia. While it may be the largest e-commerce player in the region in terms of size, under the hood, the company is far from financially healthy.
Rocket Internet’s latest financials are due Thursday, but the most recent data shows that Lazada grossed $191 million in sales during the first nine months of last year. Not bad, but the company carded a $233 million operating loss for the period, much of which was driven by the cost of acquiring users, incentives to paid to merchants and general marketing costs. Building an e-commerce company in an emerging market sure isn’t easy. Via techcrunch.com
Alibaba beats Walmart for title of biggest retailer
Alibaba (NYSE:BABA) has knocked Walmart down a peg and now ranks as the world’s largest retail company, according to a new filing with the Securities and Exchange Commission (SEC). Alibaba hasn’t reported results for its fiscal year, but in March, the company said it had achieved $476 billion in gross market value, according to the International Business Times. Walmart reported revenue $482.1 billion for its fiscal year ending Jan 31.
“With 10 days remaining in our fiscal year ending March 2016, Alibaba’s China retail marketplace platforms surpassed 3 trillion yuan in GMV. That is about $476 billion and, if the platforms we operate were a province, we would rank as the 6th largest provincial economy in China,” said Joe Tsai, Alibaba executive vice chairman, in a blog post.
Like Amazon, Alibaba is focused on developing enterprise solutions including cloud computing and data technologies. “In 2024, we want to be a business platform serving 2 billion consumers and tens of millions of enterprises at home and abroad,” CEO Zhang Yong said recently. Via fierceretail.com
How an Alibaba arm offers mouth-watering deals that Indian ecommerce players can’t
When Sumit Malhotra, a Delhi-based advertising professional, wanted to buy a 64 GB pendrive for his son, he didn’t hunt for the best deal on Flipkart, Amazon, or Snapdeal. Neither did he call his office stationery person. He got it directly from China — via AliExpress, an online shopping arm of Chinese ecommerce giant Alibaba. Reason: it cost him merely one-sixth — Rs 250 — of what was being offered by Indian ecommerce players. But there’s a catch. The pendrive was not delivered at an express pace — it took 45 days! “I ended up saving a cool 1,000 bucks,” says 38-year-old Malhotra, who also bought an iPhone cable for just a dollar.
An iPhone cable for $1? Was it genuine or fake? After all, Made in China is also synonymous with Fake in China. But Malhotra isn’t complaining. “I bought it last year and it’s still working.”
There are many like Malhotra in India who do not mind waiting for over a month nor care about the originality of the product. And that’s where AliExpress has scored. “They (AliExpress) deliver over 40,000 products every month,” says one of the top officials of an ecommerce firm. “And that’s a conservative estimate,” he adds. From mobile and computer accessories to soft toys and artificial jewellery, Indian consumers are slowly getting hooked to Alibaba. “While most of the items shipped are low-ticket, ranging from Rs 200 to Rs 2,000 — the maximum demand for such products is from tier III and IV towns,” adds the official. “And that’s what present ecommerce players in India are missing out.” Via economictimes.indiatimes.com
Consumers, brands scramble after China crackdown on cross-border shopping
A crackdown on China’s booming cross-border online shopping trade has created commercial panic and prompted local consumers to seek ways to skirt the increased tariffs and stricter rules that have led to some products being yanked off shelves.
China raised taxes on goods bought on overseas e-commerce platforms on Apr. 8, but sparked more confusion with a last-minute list that restricted some products from being sold through these channels, leading to sharp share price gyrations by firms in close trade partners like Australia. The new rules and stepped-up enforcement have also spooked China’s army of informal travelling shopping agents who have reportedly been dumping goods at customs checkpoints to avoid paying taxes.
The moves threaten to put the brakes on China’s fast-growing cross border e-commerce market, which had lured domestic shoppers with lower tax rates than conventional imports and less red tape over which products could be bought and sold. Via reuters.com
Alibaba, World’s Largest Ecommerce Site, Enters eSports Philippine eSports Organization
Singaporean social networking firm YuuZoo Corporation announced today that it has signed an agreement with Alibaba Sports Group (ASG) to launch multiple eSports tournaments for various titles. The eSports tournament series, called the AliSports World Electronic Sport Games (WESG), will include tournaments for Dota 2, CSGO, StarCraft 2 and Hearthstone. The AliSports WESG will start in April.
The tournaments will reportedly offer incredible base prize pools ($1.5 million for CSGO, $1.5 million for Dota 2, $400,000 SC2 and $300,000 Hearthstone) for these tournaments, with room for their respective pots to grow thanks to crowdfunding. In a press conference, YuuZoo said that their joint venture with Alibaba will net both companies millions in revenue from eSports’ growing audience and market share.
YuuZoo currently owns e-commerce platforms operating in China. In a press release, YuuZoo chairman Thomas Zilliacus said that their partnership will not only reinforce YuuZoo’s position in the eSports sector in China, but also grow YuuZoo’s other China-based businesses. Via eSports.net
Alibaba Joins Anti-Counterfeit Group as First E-Commerce Member
Alibaba Group Holding Ltd. will be the first Internet retailer to become a member of the largest nonprofit global organization that fights counterfeit products and piracy, part of the Chinese company’s effort to shed its image as a haven for cheap brand knockoffs.
The company has joined the International AntiCounterfeiting Coalition, which unveiled a new type of membership for “intermediaries” such as online marketplaces where counterfeits — everything from headphones to designer purses and sports memorabilia — can flourish. Alibaba reaches more than 400 million online shoppers in China, mostly through its Tmall and Taobao sites.
Chairman Jack Ma two years ago referred to counterfeit goods as a cancer for the marketplace and pledged to clean up the company’s image. His company’s been working with the IACC since 2013 through a program that has resulted in 5,000 sellers being banned from Alibaba’s marketplaces and 160,000 product listings removed. Still, regulators in China and the U.S. continue to monitor its efforts. In December, the U.S. Office of the Trade Representative warned that the company needed to do a better job fighting the sale of counterfeit goods and pirated materials if it wished to remain off the government’s annual “Notorious Markets” list. via Bloomberg
Alibaba’s Ai Predicts Winners of China’s Hit TV Show I Am a Singer
Forget artificial intelligence for board games. Alibaba Group Holding Ltd. used artificial intelligence to predict the winner of a popular Chinese reality TV singing competition – and got the winner and finalists all correct.
On Friday night, the cloud-computing arm of Alibaba, Aliyun — or Alibaba Cloud — used “Ai,” its artificial intelligence program, during the four-hour finale of Hunan TV’s “I Am a Singer.” The program worked to choose winners as the audience of 500 people who served as judges independently deliberated. The Ai predictions were featured live during the finale….
While Alibaba has used artificial intelligence internally to help with customer service and predictions of traffic patterns, the singing competition marked the first time it revealed Ai publicly. The program used factors such as the popularity of a song, the singer’s pitch and energy, the content of the lyrics and audience feedback to judge the performances of seven finalists. It then continues “learning” what resonates with people and spurts out an answer. Via WSJ
Alibaba influence spreads globally
Alibaba’s reach is global and its influence extends into many of the key market niches from e-commerce, mobile financial payments and logistics to new investments including artificial intelligence, technology, drones and much more. Like Amazon, Alibaba is a work in progress and Cashback Industry News will continue to provide coverage of its many new developments.
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