Alibaba Group Holding Limited (NYSE:BABA) Q1 2024 Earnings Call Transcript

Operator: Thank you. Your next question comes from James Lee with Mizuho. Your line is open.

James Lee: And just one follow-up question on cloud computing specifically. And Daniel, can you comment about, obviously, comment about technology, that’s super helpful. Can you talk about maybe from a marketing perspective, what verticals are important for you to pursue in the near term to drive the growth of the business and why?

Daniel Zhang: Yes. Actually, cloud is relevant to all the industries. If you ask me on which industries we prioritize, I would say, actually, first of all, I think the Internet companies, I think because all the Internet companies are digital native companies and they’re supposed to be — grow their business on cloud. And so from this part, I think if you look at the history of Alibaba Cloud, we will grow together with the Internet company especially the mobile Internet companies in China together. So, I think in this part, I think we still have a big space to penetrate to help all the internet companies. Today, not all of them are purely digital native, data-driven. And even though everybody has a mobile app and have a web page.

But I think the level of digitalization and the complexity of their digitalization is quite different. So I think in this regard, we can still work closely with them, starting with the penetration of the cloud infra and also with more penetration with the past products. I think part service and AI service today. So I think Internet, obviously, is a very important sector and also financial services because financial services is a very big industries. And there are many companies, many type of subsectors in this industry. So I think we also spend a lot of our resources on these. And also, we are also developed our services and product services to serve industries like automobile. Because if you look at the EV companies and all the EV companies, no matter they’re new EV or a new EV [indiscernible] or the existing ones, I think pretty soon, all of them, they are purely digital-driven companies.

They’re a data-driven company. So I think we will — generally speaking, I’ll just give you a few examples. But generally speaking, we will focus on the industries with higher level of digitization, and we will prioritize the industry digital native. Or they have a very successful digital transformation or the onboard from day one they are digital native. So this is our focus and strategy. Thank you.

Operator: Thank you. Your next question comes from Jialong Shi with Nomura. Your line is open.

Jialong Shi: My question has to do with e-commerce. And I’m wondering if you could talk to us about where you see things heading for the September quarter for both Tmall and Taobao in terms of DAUs and revenues. And then coming back to the June quarter, we saw a decline in margin year-on-year. So if you could please talk to us about margin in the June quarter as well as on Tmall supermarket and on Tmall and Taobao.

Daniel Zhang: Thank you. So on Tmall Supermarket, this is a 1P business that we’re operating ourselves and profit continues to improve. This year, we’ve invested very heavily in improving user experience on Tmall supermarket as part of that rolling out half day delivery service in 20 cities across China. And in those cities with half-day delivery, we’re seeing very, very significant improvements in growth in user scale orders and user satisfaction. E-commerce in general as a kind of commerce or business is affected by a variety of different factors of course, including the macroeconomic environment and competition. So rather than focusing on short-term competitive dynamics and growth numbers, we’re much more preoccupied with ensuring the long-term development of the Company of the business and then constantly surpassing ourselves.