Alibaba and JD.com released their financial reports on the same day. Who will win the “cat and dog war”?
2024-08-16
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Alibaba released its first quarter financial report for fiscal year 2025:Taotian GMV grows steadily, with double-digit growth in public cloudOur reporter Xie Lan and trainee reporter Liang AonanOn the evening of August 15, Alibaba Group released its first quarter financial report for fiscal year 2025. Strategic focus and continued investment have yielded results. E-commerce and cloud businesses, as the two core driving forces of the group, have both achieved positive progress. Among them, Taotian Group's online GMV maintained a steady growth trend and continued to consolidate its market leading position; Alibaba Cloud focused on the "public cloud + AI" strategy, with public cloud business revenue achieving double-digit growth, and AI-related product revenue ushering in a rapid triple-digit growth.Alibaba Group CEO Wu Yongming said that by focusing on good products, good prices and good services to improve user experience, Taotian Group has stabilized its market share and returned its business to growth track. The cloud computing business revenue has achieved positive growth momentum, thanks to the increased adoption of public cloud and artificial intelligence-related products, and will continue to invest to maintain its market leadership.The financial report shows that during the reporting period, Taotian Group insisted on increasing investment in improving user experience and optimizing the merchant business ecosystem, and successively launched a series of reform and innovation measures and achieved remarkable results.During the reporting period, Taotian Group was committed to comprehensively improving user experience and optimizing the business ecosystem of merchants. Through a series of innovative reform measures, it achieved significant market feedback and business growth. In order to improve user experience, Taotian took the lead in canceling the "618" official pre-sale, launched measures such as full price guarantee during the promotion, and upgraded 88VIP membership rights within the quarter.The investment in "user-first" continues to bear fruit. In the first quarter, Taobao's online GMV grew steadily, with double-digit year-on-year growth in order volume, continued growth in the number of buyers and purchase frequency, and the number of 88VIP members increased to over 42 million. During the "618" period, Taobao's online GMV grew strongly year-on-year.Taotian also launched a series of measures to enhance merchants' long-term business confidence: within the quarter, the business advisor was fully free, and the subsidy for industry consumer coupons was increased during the "618" period. On July 26, Taotian announced more measures, including optimizing the "refund only" rule and launching the "store comprehensive experience score", etc., to create a healthier business ecology for merchants and achieve sustainable growth.At the same time, Alibaba Cloud focuses on the "AI-driven, public cloud first" strategy and continues to expand its technology and scale advantages. Data shows that Alibaba Cloud's external revenue (excluding Alibaba's affiliated companies' cloud revenue) increased by 6% year-on-year, mainly due to the widespread application of AI technology and the significant increase in the adoption rate of related products. AI-related product revenue grew by triple digits, and Alibaba Cloud's quarterly adjusted EBITA grew strongly by 155% year-on-year."The fiscal year 2025 is an important period for Alibaba to continue to deepen its strategic direction and consolidate the results of previous changes." Guo Tao, deputy director of the China E-Commerce Expert Service Center, told the Securities Daily reporter that in the past few quarters, Alibaba's strategic investment in improving consumer experience, strengthening AI infrastructure construction and improving technical capabilities has initially shown a positive role in promoting business development. These investments not only verify the effectiveness of the company's strategic direction, but also lay a good foundation for achieving more stable and sustainable growth in the next fiscal year.This quarter, the synergy of Alibaba's cross-border business and cross-border fulfillment services continued to emerge, driving Alibaba International Digital Business Group and Cainiao Group to maintain rapid growth. Among them, Alibaba International Digital Business Group's revenue increased by 32% year-on-year. Cainiao's quarterly revenue increased by 16% year-on-year.In addition, the operating efficiency of multiple businesses outside of e-commerce and cloud continued to improve, and the losses improved significantly. This quarter, due to the improvement of operating efficiency and the expansion of business scale, the local life group achieved a significant reduction in losses. The quarterly operating results of Gao Xin Retail, Hema, Ali Health and Lingxi Interactive Entertainment also improved.Zhu Keli, executive director of the China Information Association and founding dean of the National Research Institute of New Economy, told the Securities Daily reporter that Alibaba has layouts in multiple fields such as e-commerce, cloud computing, digital media and entertainment, and local life services. This diversified business structure helps to resist the risks of a single market and provide multiple growth points for revenue growth. In the future, with the continuous development of various business segments and market expansion, the company's revenue is expected to continue to grow.
JD.com's second quarter revenue was 291.4 billion yuan“Quality guaranteed and low price” promotes user growthOur reporter Xie Lan and trainee reporter Liang AonanOn the evening of August 15, JD.com (hereinafter referred to as "JD.com") released its second quarter and first half results for 2024. In the second quarter, JD.com's revenue reached 291.4 billion yuan, and its revenue in the first half of the year reached 551.4 billion yuan, continuing to grow; net profit attributable to ordinary shareholders of listed companies under non-U.S. generally accepted accounting principles reached 14.5 billion yuan, a year-on-year increase of 69.0%, and the net profit margin reached 5.0% for the first time, both exceeding market expectations.Xu Ran, CEO of JD Group, said: "In the second quarter, we continued to strengthen our supply chain capabilities and user experience, helping JD.com establish differentiated capabilities in China's e-commerce industry. Through economies of scale and continuous improvement in procurement efficiency, we provide users with everyday low prices while ensuring quality. Combined with the increasingly prosperous platform ecosystem, these developments have been recognized by users, with a steady growth in the number of users in the second quarter and continued improvement in user engagement."Adhere to the concept of "user experience first"In terms of revenue structure, in the second quarter, JD.com's retail revenue reached 257.07 billion yuan, a year-on-year increase of 1.5%; JD.com's logistics revenue was 44.207 billion yuan, a year-on-year increase of 7.7%; the revenue of new businesses decreased in the second quarter to 4.636 billion yuan, compared with 7.127 billion yuan in the same period last year.Hong Yong, an expert from the think tank of the China Digital Reality Integration 50 Forum, said in an interview with the Securities Daily reporter that in the second quarter, JD.com improved the user experience by providing high-quality customer service, optimizing the mobile shopping experience, and enhancing member rights. For example, it launched faster delivery options, provided personalized product recommendations, and strengthened after-sales service. These measures have enhanced user satisfaction and loyalty, which in turn has translated into higher user stickiness and more repeat purchases, driving consumption growth.With user experience as the core, more emphasis is placed on sustainable investment and quality growth, so that the benefits can truly fall on users, and only then can the support measures really help brands and merchants improve their efficiency. The financial report shows that based on the strategic execution in the past six months, JD.com's quarterly active users and user shopping frequency continued to maintain double-digit growth momentum in the second quarter.In the first half of the year, JD.com's "Spring Dawn Plan" upgraded 32 support measures for merchants, including AI store opening, which also led to a 46% increase in the number of new third-party merchants in the second quarter compared with the first quarter. In the second quarter, JD.com's instant retail was upgraded and JD.com's delivery service was launched, which can currently provide consumers in more than 2,400 counties, districts and cities across the country with a shopping experience of the fastest delivery time of 9 minutes.Zhuang Shuai, an expert in the retail e-commerce industry and founder of Bailian Consulting, told the Securities Daily reporter that in order to stand out in the service competition, merchants need to focus on the refinement of platform operations, continuous optimization of organizational structure and processes, deep integration of cutting-edge technologies and efficient tools, and comprehensive digital transformation to enhance operational efficiency and promote organizational flexibility. Such a strategy can accelerate the response speed to changes in user needs, improve sensitivity to market dynamics, and reduce customer acquisition costs and achieve steady growth in profit margins by providing service quality that goes beyond the norm and sets industry benchmarks.AI helps businesses reduce costs and increase efficiencyThe financial report shows that as of the second quarter, JD.com's supply chain infrastructure assets reached 156 billion yuan, an increase of 11% year-on-year. According to reporters, JD Logistics has nearly 100 bonded warehouses, direct mail warehouses and overseas warehouses around the world, with a total management area of nearly 1 million square meters, and can deliver packages to major European and American countries within 3 days at the fastest.By continuously optimizing the network layout and iterating the application of technology, the operational efficiency and quality of each link in the supply chain have continued to improve, and the economies of scale have become increasingly significant, laying a solid foundation for the stable development of JD Logistics. This series of measures not only improves the overall efficiency of logistics services, but also provides strong support for JD's continued growth in the retail e-commerce field.It is reported that JD.com has fully transformed itself into technology in 2017. By the end of the second quarter, JD.com's R&D investment has accumulated nearly 130 billion yuan. With more than 10 million SKUs of self-operated products, JD.com's inventory turnover days in the second quarter continued to maintain a global leading level of less than 30 days.Hong Yong said that JD.com continues to increase investment in technological transformation, especially in the application of artificial intelligence and big data, such as improving delivery efficiency through intelligent logistics systems, using AI technology for precision marketing, and optimizing inventory management through data analysis. These technological innovations directly promote profit growth by reducing operating costs, improving service efficiency and increasing sales revenue.In the second quarter, JD.com continued to promote the implementation and application of digital technologies such as cloud computing, big data, and AI in physical industry scenarios. During JD.com's "618" event, Yanxi Digital Human worked with 5,000 brands to broadcast steadily, with a cumulative number of viewers exceeding 100 million. 21 CEO Digital Humans appeared in JD.com's live broadcast room, launching the industry's first large-scale practice of CEO Digital Humans.With the help of JD.com's AIGC content generation platform, as of the second quarter, 140,000 third-party merchants can generate product images, operation and marketing copy, product short videos and other content materials required for store operations with one click, increasing merchants' content production efficiency by more than 90%.In Zhuang Shuai's view, JD.com has comprehensive transaction, logistics, user behavior and product data, which provide a solid foundation for its artificial intelligence and digital transformation. By continuously increasing investment and application in cutting-edge technologies such as AI, big data, and cloud computing, JD.com will further optimize user experience, reduce merchant operating costs, improve overall operating efficiency, and achieve a win-win situation for users, merchants, and the platform.Image | ZCOOL
Produced by Wang Xueer and Zhang Wenling
Review | Jiao Yue
Editor | Guo Zhichen Shangguan Monroe
Final Review | Bai Baoyu
