Alibaba reaches new heights
"Over the next three years, Alibaba will embark on a new journey with an entrepreneurial mindset. With driving strong business growth as the core goal, we are fully confident in continuously investing in our core businesses to enhance our competitive edge and achieve long - term growth."
At the quarterly earnings conference held on August 29, Wu Yongming, CEO of Alibaba Group, said so.
The information revealed by the management is clear and firm: The technology platform centered around AI + Cloud and the large - scale consumer platform integrating shopping and life services are the two major historical strategic opportunities facing Alibaba Group. Alibaba will take driving strong business growth as the core goal and firmly invest in future development.
The newly released quarterly financial report just a few hours ago shows that if the revenues of disposed businesses of Sun Art Retail and Intime are excluded, Alibaba has achieved steady growth. Calculated on a comparable basis, the group's total revenue increased by 10% year - on - year; the customer management revenue of the core business, China's e - commerce business, increased by 10% year - on - year; and the revenue of the Cloud Intelligence Group accelerated to a 26% year - on - year growth.
After 26 years of establishment, with steady performance, why is Alibaba "starting a new business"?
01. Cloud Intelligence Growth Reaches a Three - Year High, and Investment in Instant Retail Yields Results
This quarter, Alibaba Cloud has shown outstanding performance. According to the financial report, the revenue growth of the Alibaba Cloud Intelligence Group accelerated to 26%, reaching a new high in the past three years. The quarterly revenue from external commercialization of Alibaba Cloud increased by 26% year - on - year. Among them, the revenue from AI - related products has achieved triple - digit year - on - year growth for eight consecutive quarters, and AI revenue has accounted for more than 20% of the external commercialization revenue.
In terms of model progress, recently, Tongyi AI large - scale model has achieved "N consecutive releases". It has successively open - sourced new versions of Qianwen 3 non - thinking basic model, inference model, and AI programming model, winning the global open - source championships in mainstream fields such as basic models, programming models, and inference models respectively. Tongyi has also open - sourced multi - modal models such as the video generation model Wan2.2 and the text - to - image model Qwen - Image to support customers in developing AI applications and building a long - term prosperous AI ecosystem.
In the re - integrated large - scale consumer business segment, Alibaba's investment in instant retail has begun to yield initial results.
At the end of April this year, in response to consumers' instant delivery needs for various categories of goods such as catering, daily necessities, electronic products, and clothing, Taobao launched the "Taobao Flash Purchase" service. In just four months, it has covered more than 300 cities across the country, with 300 million monthly active buyers (MAC). In the first three weeks of August, this service drove a 25% year - on - year increase in the MAC of the Taobao APP.
Meanwhile, the synergistic effect of the instant delivery service on other businesses within the ecosystem has also begun to emerge. In terms of membership integration, Taobao has launched a super - membership system, integrating the membership rights of Ele.me, Fliggy, and AutoNavi, covering life scenarios such as food, clothing, housing, and transportation. The number of 88VIP members continued to maintain double - digit year - on - year growth, exceeding 53 million. The customer management revenue increased by 10% year - on - year to 89.252 billion yuan ($12.459 billion). The monthly active consumers and daily order volume of Alibaba's China e - commerce group continued to reach new highs.
02. The Historical Opportunity in Large - Scale Consumption
Compared with the previous period, a significant change in the new quarterly financial report is that the segment reporting structure has been simplified, divided into Alibaba China E - commerce Group, Alibaba International Digital E - commerce Group, Cloud Intelligence Group, and all others.
This change stems from the business integration during the reporting period. This quarter, Taotian Group, Ele.me, and Fliggy completed strategic integration and jointly formed Alibaba China E - commerce Group. Wu Yongming said that this is an important measure for Alibaba's strategic upgrade from an e - commerce platform to a large - scale consumer platform.
At the earnings conference after the release of the financial report, Wu Yongming mentioned again that Alibaba is based in China, the world's largest e - commerce market and the most promising service consumption market, with well - developed e - commerce infrastructure, high population density, and strong service consumption demand. There are basic conditions for the integration of instant retail and e - commerce. The integration of near - field consumption and far - field e - commerce can not only meet users' one - stop consumption needs but also satisfy merchants' needs to serve consumers in multiple scenarios, and will also contribute to the birth of a one - stop consumption assistant in the AI era.
Wu Yongming said: "Alibaba's layout in the instant retail field is not focused on the competition of a single consumer category but aims to meet the one - stop needs of one billion consumers and shape the business form of a large - scale consumer platform in the AI era." Alibaba's long - term goal in the large - scale consumption field is to meet the full - scenario shopping and living consumption needs of one billion consumers, create a large - scale consumer platform with the best experience, the largest number of consumers, and the highest consumption frequency, and lead the large - scale consumer market worth 30 trillion yuan in the future.
Affected by this, consumers' behavior habits are changing, gradually shifting from "planned stockpiling" to "ordering everything" through instant delivery. During this year's Tmall 618, the order structure of Taobao Flash Purchase expanded significantly to all categories, and the number of non - catering orders increased by as much as 179% year - on - year. In August, the average daily order volume of Taobao Flash Purchase reached 80 million orders, and the peak daily order volume reached 120 million orders.
On the other hand, this measure has also strengthened Taobao APP's leading position in the Chinese e - commerce industry. The financial report shows that as part of the instant retail strategy, Taobao has expanded the supply of non - catering goods and the coverage of corresponding front - warehouses. While optimizing the user experience and improving operational efficiency, it has also promoted the synergy between instant retail and other parts of the Alibaba ecosystem by integrating the supply chains, users, and membership rights of various businesses.
Moreover, it is worth noting that the market potential is being further explored. Data from the China Internet Network Information Center shows that the daily order volume of catering + instant retail has increased from 100 million to 250 million, of which 60% is new demand.
Wu Yongming said that in the consumer field, the company's long - term goal is to build a comprehensive consumer platform covering the full shopping scenarios and daily life needs of one billion consumers, strive to provide the best experience for the largest - scale and highest - frequency consumer group, and ultimately take the leading position in the potential large - scale consumer market worth 30 trillion yuan.
03. Building a Technology Platform Centered around "AI + Cloud"
In Wu Yongming's view, "The transformative impact of AI on all industries, combined with the in - depth integration of AI and cloud, will bring the most significant opportunities in the technology field in the next decade."
To seize this opportunity, Alibaba plans and promises to invest 380 billion yuan in building cloud and AI hardware infrastructure over the next three years. The further increase in capital expenditure this quarter also fulfills this promise.
This quarter, Alibaba's capital expenditure in the AI + Cloud field reached 38.6 billion yuan, a record high. The company has cumulatively invested more than 100 billion yuan in AI infrastructure and AI product R & D in the past four quarters.
The continuous huge investment has built a solid moat for Alibaba in the AI era. As Wu Yongming said: "We have the world's fourth - largest and Asia's first - ranked cloud infrastructure, as well as full - stack technical capabilities from AI computing power, AI cloud platforms, AI models, open - source ecosystems to AI applications."
The continuously widening moat has also made the path of Alibaba's comprehensive growth clearer. In Wu Yongming's view, the support behind this growth mainly comes from two aspects:
Firstly, driven by the surging AI demand, Alibaba Cloud has resumed rapid growth.
This quarter, the revenue growth of the Alibaba Cloud Intelligence Group accelerated to 26%, reaching a new high in the past three years. The quarterly revenue from external commercialization of Alibaba Cloud increased by 26% year - on - year. Among them, the revenue from AI - related products has achieved triple - digit year - on - year growth for eight consecutive quarters, and AI revenue has accounted for more than 20% of the external commercialization revenue.
Secondly, the AI experience in a wide range of to C and to B scenarios has been further upgraded, creating new user and industry value and bringing more opportunities for the commercialization of open - source models in the future.
Wu Yongming revealed at the earnings conference: "Based on the continuously upgraded open - source models, we are enabling our customers to develop their own AI applications."
Meanwhile, in Alibaba's own native applications, in August, AutoNavi Map announced full AI - enabled transformation and launched AutoNavi Map 2025, the world's first AI - native application based on maps, popularizing spatial intelligence in the ever - changing real - world scenarios and having the opportunity to become an important new entrance for future life services through AI upgrades.
DingTalk has also completed its latest AI upgrade, creating the world's first work mode driven by "intelligent agents" to explore the application paradigm of the next - generation workplace.
In addition, Wu Yongming also said: "On the Taobao platform, huge opportunities driven by AI are emerging, such as AI search and AI advertising platforms."
04. The "Re - entrepreneurship" of Long - termism
At this quarter's earnings conference, Wu Yongming painted a clear and confident blueprint for Alibaba's future.
Facing the increasingly fierce market competition, Alibaba did not choose to be conservative but boldly bet on the two growth engines of "AI + Cloud" and "Large - scale Consumption", and clarified the growth path in the new AI era with the spirit of "re - entrepreneurship".
This undoubtedly sends a strong signal of "long - termism" to the market.
As Wu Yongming said: "In the next three years, Alibaba will embark on a new journey with an entrepreneurial mindset. Through continuous investment in the two strategic fields of 'Large - scale Consumption' and 'AI + Cloud', we will drive strong business growth. We firmly believe that these investments in our core businesses will enhance our competitive edge and provide impetus for long - term growth."