Likes Received9 key takeaways from Alibaba's latest financial report
Today, Alibaba released its financial report as of September 30. After reviewing the report and the earnings call, here’s a brief summary:
1. Alibaba's China e-commerce revenue reached 123.6 billion yuan, with customer management revenue growing by 10%, mainly benefiting from the increase in take rate. Alibaba is raising its take rate, while Pinduoduo is lowering it—both are moving in opposite directions. This quarter saw a cliff-like drop in profits, with operating profit down 85% YoY. Looking forward to Meituan’s earnings report on 11/28 to see how the competition is doing.
2. Alibaba’s AI focus was previously on B2B but is now expanding to B2C. Last week, it launched the Qianwen App, which will integrate e-commerce, maps, and local services, aiming to become the AI gateway for C-end users’ daily lives. Qianwen was previously called “Tongyi Qianwen,” following the trend of names like “Wenxin Yiyan”… The new name “Qianwen” sounds nice.
3. Beyond food delivery, Taobao’s flash sales have two core values for Alibaba: (1) boosting daily active users for the Taobao app, i.e., “food delivery driving traffic to e-commerce”; (2) connecting Tmall’s offline stores to provide consumers with a more differentiated experience, with 3,500 brands already onboard. In the future, Taobao’s flash sales will compete with Meituan’s flash sales in terms of consumer perception—whether it’s more natural to “flash buy” clothes on Taobao or order food and “buy clothes” on Meituan. As consumers, we can close our eyes and imagine.
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4. This quarter, Alibaba spent heavily on AI and flash sales, with free cash outflow of 21.8 billion yuan, but its cash reserves remain high at 573.9 billion yuan—ample ammunition, more than enough, truly more than enough (pity Meituan for three seconds). In contrast, Pinduoduo’s latest cash reserves stand at 423.8 billion yuan, with an average quarterly increase of 30.7 billion yuan over the past three quarters. At this growth rate, assuming Alibaba’s cash reserves remain unchanged, Pinduoduo’s surpass Alibaba in just over a year.
5. AIDC turned profitable with 1.62 billion in earnings, compared to a 2.9 billion loss YoY. Not envious of Alibaba’s overseas profitability, but envious that shareholders can actually see it. When will TEMU stop being a black box? Disclose a bit more information, please.
6. On the AI bubble, Eddie Wu said not only are the latest GPUs running at full capacity, but even those from three or five years ago are maxed out. He believes that within three years, the so-called AI bubble is unlikely to exist. I think the key is still user demand—like mining, when it’s profitable, GPUs are hard to come by; when it’s not, a crash happens immediately.
7. 88VIP membership has reached 56 million, up by 3 million from last quarter. These users are truly Alibaba’s core assets, its final moat—Pinduoduo dreams of turning them into its own.
8. Taobao’s flash sales have shifted from positional warfare to a war of attrition. The current focus is on maintaining market share while optimizing the unit economics of food delivery to close the efficiency gap with Meituan. Since October, unit economic losses have dropped 50% compared to July-August, and non-beverage orders have risen to 75%. This proves Jiang Fan’s judgment last quarter: “Efficiency is meaningless without scale.” Jiang Fan also firmly believes flash sales and Taobao’s ecosystem have huge synergy potential—this view remains unchanged. Taobao’s flash sales aim to drive trillion-yuan GMV for the platform in three years, though the exact calculation isn’t clear.
9. Alibaba has made it clear that its focus in consumer sectors is on consolidating existing businesses, with no plans to enter new areas. Jack Ma’s “Return to Taobao, Return to Users, Return to the Internet” still echoes. Previously, I didn’t quite understand what “Return to the Internet” meant, but now, seeing Alibaba divest offline assets like Freshippo, the message is clear. Rumors swirled that Ele.me would be sold to Douyin—so detailed they seemed credible—but I thought it was impossible. If Ele.me had been sold back then, we’d be slapping our thighs in regret now.
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