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Oct 12, 2020 09:07 pm ·

China's Fourth Telecom Operator Established, Alibaba as Second Shareholder

Having been long dominated by the three major telecom operators – China Mobile (CHL:NYSE, 00941:HK), China Unicom (CHU:NYSE, 00762:HK), and China Telecom (CHA:NYSE, 00728:HK), the Chinese telecom operator industry now has another player on the table, namely the China Broadcasting Network International. The company is partly state-backed and partly held by private companies such as Alibaba – that company's (BABA:NYSE, 09988:HK) investment arm, with equity percentage at 9.88% , constitutes the second-largest shareholder. Before the company's official establishment, the China Radio and Broadcasting group has already received the 5G network operation license from China's Ministry of Information and Technology (MIIT) in late 2019. The entrance of radio and broadcasting company into the telecom operator realm is inevitable, as the TV programs are transitioning from the local radio signal delivered to Internet-based. After the China Broadcasting participating in the operator business, it can be expected that the TV network in China can be the same as the mobile phone network, which breaks the current geographic constrains. The company will release SIM card numbers that start with '192' to the Chinese consumers soon. As part of the strategic agreement that the China Broadcasting reached with China Mobile, the users of the former, which currently only have the 5G network services provided, can also access the 4G network provided by China Mobile.

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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 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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Aug 21, 2020 04:20 pm ·

Alibaba Records a Gratifying CNY 153.7 Billion Revenue in 1Q 2020, Up 34% YoY

On August 20, Alibaba Group announced its first-quarter financial report. The report shows that Alibaba saw revenue of CNY 153.75 billion, a year-on-year increase of 34%. The net profit attributable to ordinary shareholders was CNY 47.59 billion, a year-on-year increase of 2.40%. Core e-commerce accounted for 87%, and cloud computing accounted for 8%. New retail,  Cloud computing, Cainiao Logistics, Innovative business, Digital media and entertainment business increased by 80%, 59%, 54%, -6% and 9% respectively, indicating that new retail business has become the main driving force. Local life servicea achieved revenue of CNY 7.10 billion, a year-on-year increase of 15%. however, Ele.me is facing tremendous pressure from Meituan, and its market share has fallen below 30%. Alibaba International Station handed in a dazzling transcript. Revenue reached CNY 3.20 billion, an increase of 43% YoY. The reason is mainly from the increase in the number of paying members and service income such as cross-border supply chains. Mobile monthly active users in China's retail market increased to 874 million, an increase of 28 million from March 2020. GMV from Taobao Live continued to grow by more than 100% year-on-year, and merchant live broadcasts accounted for 60% of Taobao Live GMV.  Following the US ban on Chinese Internet companies, Alibaba replied: "We are closely monitoring the changes in the US government's policies on Chinese companies, tracking and evaluating the possible impact of these changes on Alibaba, and taking new compliance measures accordingly. "

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Jul 20, 2020 05:25 pm ·

Alibaba's Ant Group Seeks Dual Listing on Hong Kong and Shanghai Bourses

Ant Group (formerly Ant Financial) has announced that it plans a dual listing on the Hong Kong Exchange and the Shanghai Star Market. The fintech company is the parent company of China's largest mobile pay solution company AliPay. Ant Group was valued at USD 153 billion post its series D financing, and now the valuation is estimated at around USD 200 billion, making it the most valuable unicorn in the world. Founded in 2014, Ant Group has expanded its business from digital payment solutions to digital financial services, including wealth management, micro-financing and insurance. Meanwhile, the company has extended its reach to over nine regions worldwide – notably to Southeast Asia – by forming strategic partnerships. Alibaba reported a gain of USD 752 million from its equity investment in Ant Group in F2019. Estimated from its stake holder’s financials, the net profit of Ant Group was around USD 2,279 million in the past 12 months as of March 31, 2020. Worth mentioning is that digital financial services had contributed more than 50% of Ant Group’s overall revenues for the foregoing 12 months as of March 31, 2020. SMIC (688981:SH, 00981:HKEX) is currently the most valuable company in the Star Market, with a market cap of CNY 587 billion (USD 83 billion). With its current valuation, Ant Group’s size on the Star Market is tantamount to a cargo ship in a pond. Under Sino-American tensions, a dual-listing plan in Hong Kong and Shanghai is probably the best fit for the Chinese unicorn. Even with such an IPO plan, Ant Group may still create the largest IPO record on the young Star Market.

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Jul 16, 2020 03:22 pm ·

After Meituan, Alibaba Announces Entrance into Community Group Buying

According to 36kr, Alibaba’s retail department is currently preparing to set up a new community group purchasing department. The person in charge, P10-ranked Zou Zhijun, in place since not long ago, reports directly to Lin Xiaohai, General Manager of the Retail Department. A person close to Alibaba has said “Zou's team is still under construction.” It is worth noting that this is another giant that has entered the field after Meituan issued an organizational adjustment announcement, claiming that it will set up a ‘Youxuan Division,’ entering the community group buying track. With Chen Liang, the Senior Vice President and S-team member responsible. “Community group-buying is essentially a competition of goods and supply chain capabilities. Small shops are the main battlefield of community group buying. They have private domain traffic. How to help small shops make cash and increase revenue is a matter that the platform should consider. Retail has powerful goods and the abilities of the supply chain – so it is not surprising there is a drive to get involved in community group purchases,” said Zou Zhijun. Before joining Alibaba, Zou was the founder and CEO of the startup ‘Miao Sheng Huo’ (妙生活), an O2O platform established in 2015 focusing on fresh fruit. It not only supported consumers buying at the store but also provided a three-kilometer delivery service around the store. Due to high costs and difficulties in financing, the company was shut down at the end of 2019. The entry barrier to the track is low, but the barriers to competition are high. With the entry of Meituan and Alibaba, the community group buying competition is entering a new stage.

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