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Briefing Sep 16, 2020 10:29 am EqualOcean

Alibaba is in Talks to Invest Zhilian Zhaopin

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Sep 28, 2020 05:45 pm ·

Alibaba Global Investor Conference: 70% of New Users are from the Sinking Market

On September 28, Alibaba's 2020 annual global investor conference was held online. Jiang Fan, the President of Tmall, outlined how, in the first quarter of 2020, Tmall's physical product transaction growth rates reached 27%. And the growth rate of core categories such as apparel, fast-moving consumer goods, and consumer electronics significantly exceeded the growth rate of the Chinese retail market. The annual active consumers of Alibaba's retail market in China reached 742 million, and the monthly active users increased by 119 million, of which 70% of new users came from the sinking market. The two paid memberships of '88VIP' and 'Taobao Money Saving Yueka' have continued to grow. The brand flagship store has been an essential product for merchants on Tmall over the past ten years. Flagship Store 2.0 helps merchants use digital technology and mini-programs to draw more accurate consumer figures. As of the end of August 2020, Tmall flagship store 2.0 had covered 270,000 merchants. Taobao live broadcast has driven the boom of e-commerce live broadcast. In the past 12 months, Taobao Live's turnover exceeded CNY 300 billion. The number of live broadcast users increased by 160% year-on-year, and the year-on-year growth rate of merchants participating reached 220%. In the apparel industry where Taobao has the largest transaction scale, Alibaba's new manufacturing platform 'Xunxi' will provide small and medium businesses in these apparel fields with a data-driven, flexible manufacturing production supply chain.

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Sep 22, 2020 08:10 am ·

Business Dissection of Ant: One-Seventh of Global Population Uses Alipay [2/2]

In the first part, we introduced Ant Group's digital payment services, here we discuss its digital financial service business.  Digital financial services Ant Group provides financial technology support to FIs and helps them to reach clients, including micro-credit companies, wealth management and insurance. The partners, including commercial banks, asset management companies, insurance companies, trusts, securities companies and other FIs, provide financial services to clients through the Alipay platform. The revenues are generated from the fees charged from the partners' interest income in credit services, assets under management (AUM) in wealth management services, and premiums in insurance services. The company also directly provides such services through its subsidiaries. The users on Alipay that used more than one kind of financial service reached 729 million by the end of the second quarter of 2020, whose figures of money spent have surged 10 times since 2015. Within the sector, wealth management and micro-credit lending services dominate the business.  Micro-credit platform  Ant Group cooperates with FIs to offer credit lending that targets unserved consumers and unbanked SMBs. The micro-credit platform provides FIs with innovative product developments, customer reaching and risk management. Now Ant Group is the largest online consumption and business credit service provider. During the LTM at the end of the second quarter of 2020, the company helped over 500 million individuals and 20 million small merchants through cooperation with over 100 banks.  Ant CreditPay (Chinese: 花呗) and Ant Cash Now (Chinese: 借呗) are the two main products that focus on individuals. The intelligent business decision model that can assess the credit performance of customers gives corresponding credit amounts to them immediately, which conveniences the customers, especially those with no credit cards, and helps them to build credit records. The credit given by Ant CreditPay can be used on applicable purchases both online and offline. The money cashed from Ant Cash Now can be withdrawn immediately after requests are issued to the Alipay account or bonded debit card.  MYbank is the most important partner of Ant Group in offering business lending services, as the latter is the originator of MYbank with 30% of the shares held. The company focuses more on the clients' reaching and some technology supports, MYbank runs the credit assessment system independently and prices credit products. Both of them also offer third-party FIs with credit assessment system building.    Now the sector accounts for the largest portion in the digital financial service sector, taking up 62% of the total revenue, and has been growing steadily. Wealth management platform  In 2013, Ant Group launched Yu'E Bao (Chinese: 余额宝), which is a basic asset management product for customers, and also the largest money market fund globally based on the AUM. What’s more, it cooperates with over 170 asset management companies to provide precise and varied products over 6000 different kinds to clients. In the twelve months through the end of June 2020, over 500 million users invested in the products through the Alipay platform.  In order to recommend most suitable products to clients and better supervise their accounts' risk situation, Ant Group developed an intelligent financial advisor to simplify the matching process between products and clients. Along with the AI and big data technologies, the company offers customized investment courses and market information, as well as risk alarms on accounts to help them manage their wealth better. Also, through the company's platform, asset managers directly communicate with clients.  Insurance platform Ant Group helps insurance companies to offer innovative insurance products with lower price barriers and easier application processes. Through the Alipay platform, customers can access over 2000 insurance products that cover life, health and property insurance, and also some new products such as a 'mutual plan' that enables the users to invest and help others in advance, just like insurance. In the twelve months through the end of June 2020, over 570 billion users were covered in insurance plans through Alipay, which are provided by both Ant Group and over 90 third-party insurance companies. 

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Sep 22, 2020 03:41 am ·

Business Dissection of Ant: One-Seventh of Global Population Uses Alipay [1/2]

Ant Group focuses its business on digital payments and financial services, which together make up over 99% of revenue.  The client base of the company includes almost all entities in society, including individual customers, merchants, companies and financial institutions.  Ant Group was established in 2004 when the e-commerce industry development was just getting started planetwide. The company launched the payment platform Alipay, which was developed to bridge the gap between customers and merchants. It is now the largest digital payment provider and the leading fintech platform in China, by total transaction volume. Helping to digitalize people's lives, Alipay is a platform that supports their most fundamental needs through an array of technological tools. Through Alipay, Ant Group provides: ►… consumers with a comprehensive menu, which includes financial services (digital payments, consumption loans, wealth management and insurance, among others) and daily life services, such as food delivery, traveling, and entertainment.  ►…merchants with payments services and financial services, such as credit lending to small businesses, the wealth management products. The mini apps embedded in the Alipay platform help merchants to reach more customers and link their offline and online services. ►…companies with intelligent business solutions on asset management, decision making and technology infrastructure construction.  ►…financial institutions (FIs) with technical support. They can reach more customers and even cooperate with each other through the Alipay platform, which supports both FIs and customers. By the end of the first half of 2020, the operation results of Ant Group showed that Alipay is not only a payment tool but an entire infrastructure layer embedded in people's daily lives now. The synergies of combining the payments and financial services on one platform are showing up.   Digital Payments  Ant Group provides payment services on commercial transactions, financial transactions and personal transactions. Through the Alipay app, payments can be processed among individuals and merchants, as well as financial institutions, and the service fees are charged from every payment. What is more, Ant Group also generates revenue by helping the merchants with the development of their unique mini programs. The app has gathered over 100 million users and 8,000 merchants globally. In the twelve months through the end of June 2020, it completed over CNY 118 trillion in transactions. Transaction services Transactions can be made through four tools that are divided by five types of accounts, as shown below. The payment scenarios include commercial, credit payment, transfers between individuals and other financial transactions. The independent-developed technologies support the platform to operate under large-scale and frequent transactions with the payment loss rate lower than 0.6 of billions, which ranked first in the global payment providers with a transaction scale larger than USD 500 billion.  Merchant services At the end of the first half of 2020, there were over 2 million mini programs on the Alipay platform. These give merchants access to techniques for attracting new customers and offering services, and binds the two sides closer. Through Alipay, the merchants can manage their customers and therefore develop strategies to maintain activity. Customers can easily order food on Alipay in advance and merchants can offer discount coupons through mini programs. What is more, the credit rating product, Zhima Credit (Chinese: 芝麻信用), which is similar to the FICO score in the US, enables the merchants such as hotels and car renting companies to access to users' credit performances and therefore waive the deposit in advance if applicable.  Cross-border services Though the main digital payment businesses are centering in mainland China, Ant Group is also promoting linkages between merchants and customers, banks and small to medium businesses (SMBs) in over 200 countries.  The services are provided through the cooperation between Ant Group and the local acquirer, banks, digital wallets and Independent Software Vendors (ISV). In the twelve months through the end of June 2020, the company had dealt with over CNY 622 billion transactions outside of China. Customers can easily purchase products both online and offline and exchange currency in other regions through Alipay. Also, Ant Group offers payment solutions to global merchants, such as AliExpress, a cross-border B2C online shopping platform, and Lazada, a large e-commerce platform in Southeast Asia.  (This is the first part of the series article. In the next part, we will discuss the digital financial service business of Ant Group.)

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Sep 21, 2020 02:55 pm ·

Alibaba Cloud Launches 1.0 Version of PaaS for Cloud Gaming, Taking On Tencent

At the 2020 Yunqi conference, Alibaba Cloud released its first Cloud platform for developers, the model for which focuses on helping businesses, instead of delivering services to gamers.  Cloud gaming has been given high expectations in recent months as 5G and cloud gaming technologies are evolving. Tencent, China Mobile (CHL:NYSE) and NetEase (NTES:NASDAQ) all rolled out their ready-to-play cloud gaming services. As a competitor of Tencent (00700:SEHK), Alibaba's (BABA:NASDAQ, 09988:HKEX) attitude towards gaming has been blurring. Jack Ma once said they would starve rather than join in the gaming business. He later expressed in 2010 that ''gaming cannot change China, we won't invest a single coin in gaming and this is our principle.'' But the fact is that in 2014, Alibaba launched their mobile gaming platform, targeting game distribution, in which the giant was willing to deliver 70% of total return to game content providers, with 10% of return going to charity. During seven years of developing gaming products, Alibaba initially took over some companies to enter the market. It used traffic to establish channels for distributing games. As traditional distribution fell back, It has to serve as a content agency and issuer and even further developed games. However, there was no significant success in the gaming business, as reflected by the infancy of the revenue figures. Until 2020, Alibaba first tasted the sweetness of some progress on the gaming business: its Sanguo Zhi Strategic Edition currently ranks number 3 in the Chinese Apple application store. The No.1 and No.2 games are Tencent's Honor of Kings and PlayerUnknown's Battlegrounds, respectively.    

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Sep 18, 2020 05:20 pm ·

Alibaba Games Upgrades to Standalone Group, Yu Yongfu in Charge

The Interactive Entertainment Division (灵犀互娱), which is affiliated to Alibaba's game business, will be upgraded into an independent business group, parallel to the Entertainment department. At the same time, Yu Yongfu, chairman of the AutoNavi Group, will soon be in charge of Alibaba's game business. He is also the former helm of Alibaba's Mobile Entertainment department. The game business accounts for almost 25% of the total revenue of the entertainment group by one game. Alibaba Group's financial report for the first quarter of the fiscal year 2021 (as of the end of June 2020) shows that the revenue of the digital media and entertainment business is CNY 6.99 billion. Starting from the first quarter of 2021, game business revenue will no longer be included in the innovation business, but in the digital media and entertainment business. After the adjustment, Alibaba's innovative business revenue decreased by CNY 1.19 billion from the previous quarter, while the digital media and entertainment business revenue increased by CNY 1.05 billion. The adjusted EBIT of the digital media and entertainment business narrowed significantly to 19% from 57% in the previous quarter. According to Sensor Tower, as of August 2020, the monthly revenue of 'Three Kingdoms: Strategic Edition' was CNY 600 million, making it the third-highest game in China. "The actual significance of this game is not income, but an assertion or self-certification of the independent research ability of Alibaba Games, which will greatly improve the overall morale," said a person close to Tencent Games.

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Sep 17, 2020 03:43 pm ·

Alibaba Apsara Conference: Cloud Computers and First Robot Unveiling

On September 17, 2020, the Apsara Conference went online. The Cloud gaming platform PaaS1.0 was officially unveiled. Alibaba's Cloud gaming team stated that it would fully invest in 'new infrastructure' to support industry innovation. Also, Alibaba released its first Cloud computer 'Wuying' and its first logistics robot 'Xiaomanlv.' 'Wuying' is a supercomputer that 'grows' on the cloud. There is no CPU or hard disk as these functions are entirely inside the Cloud data center. With a C-Key, users can log in their fingerprint ID anytime and anywhere to access cloud computing services. Through connecting C-key to any monitor such as a TV or a screen, people can enter the dedicated Cloud desktop and access various applications and files. Currently, Wuying is only available for sale to enterprises. In the future, services may be provided to individual users. 'Xiaomanlv' is Alibaba's first wheeled robot, specially equipped for deliveries; it can easily handle complex road conditions and swiftly choose an optimal path. Its 'brain' reacts seven times faster in emergencies. It can 'run' more than 100 kilometers with 4 kilowatt-hours of electricity, and deliver up to 500 packages per day. Extreme environments such as thunderstorms, lightning, high temperature, rain and snow, garages and tunnels will not hamper its performance. Zhang Jianfeng, Dean of Alibaba DAMO Academy, stated that this robot will soon be used on a large scale in communities, schools, and office parks. Commenting further on Cloud gaming, said Zhuang Zhuoran, the Vice President of Alibaba Group, stated that "Cloud gaming will become the main scene of personal consumption in the 5G era. What PaaS 1.0 has to do is to set up a platform for industry partners and deepen the infrastructure and underlying system software for cloud gaming. Besides, it integrates Internet applications such as e-commerce, financing, services and content to connect to the new digital consumption scene of Cloud gaming."

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Sep 22, 2020 10:24 am ·

Yonghui Superstores Opens Four New Stores

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Sep 22, 2020 10:19 am ·

JD.com Confirms JD Health's Listing Plan

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