Alibaba’s adjusted earnings before interest, tax, depreciation and amortization in the first fiscal quarter of 2023 were 41.11 billion yuan, a year-on-year decrease of 15%, and an estimated 34.19 billion yuan. Adjusted EBITDA margin was 20%, compared to 24% a year earlier and an estimate of 17.4%.
Financial report screenshot
Zhang Yong, Chairman and CEO of Alibaba Group, said: “In the past quarter, we have actively responded to various changes in the macro environment, and have always focused on long-term strategies by continuing to strengthen our ability to create value for customers. The monthly growth rate is relatively slow, but we have seen signs of improvement in June. Based on the high-quality consumer group we have and the resilience of our diversified businesses that meet the different needs of our customers, we are confident about future long-term growth. “
Alibaba said that in April and May, the epidemic caused various levels of supply chain and logistics disruptions in various places. In the consumer sector, since late May, with the normalization of logistics capacity, the platform and merchants have jointly seen signs of recovery. In the June quarter, the GMV growth of online physical goods on Taobao and Tmall gradually recovered, and the GMV of Tmall 618 payment achieved positive year-on-year growth.
In the 12 months ended June 30, 2022, over 123 million consumers spent over RMB 10,000 annually on Taobao and Tmall, with an annual activity rate of about 98%.
The payment GMV of M2C (direct supply model) products on Taobao and Taote increased by more than 40% year-on-year, and the GMV of Taocaicai also increased rapidly, exceeding 200% year-on-year.
As the impact of the epidemic eased, the monthly performance of the local life service segment continued to improve, and by June the GMV of the entire segment returned to positive growth. On June 21, the Ele.me free order campaign was launched. So far, it has freed more than 3.5 million orders for consumers, covering 600,000 merchants. In June, the average daily active users of AutoNavi hit a new high of over 120 million.
In the industry sector, this quarter, Alibaba Cloud’s revenue increased by 10% year-on-year after offsetting cross-segment transactions, and adjusted EBITA was profitable for seven consecutive quarters.
In the international business segment, in the June quarter, Lazada’s orders in Southeast Asia achieved a healthy growth of 10% year-on-year, and Trendyol orders increased by 46% year-on-year. International wholesale commerce continued to help small and medium-sized merchants go overseas, and the transaction volume completed by Alibaba.com in the quarter increased by 16% year-on-year.
In order to better cope with external uncertainties, this quarter, through continuous improvement of operational efficiency and optimization of cost structure, the losses of Taote and Lazada both narrowed year-on-year and quarter-on-quarter, Taocaicai’s losses narrowed significantly month-on-month, and Youku has five consecutive quarters The realized loss narrowed year-on-year, and the unit economic efficiency of Ele.me continued to improve.
Performance highlights:
Business and strategic progress
Chinese business
The China commerce segment mainly includes retail commerce businesses in China such as Taobao, Tmall, Taote, Taocaicai, Hema, Tmall Supermarket, Sun Art Retail, Tmall International and Ali Health, as well as wholesale businesses including 1688.
For the quarter ended June 30, 2022, Taobao and Tmall’s online physical goods GMV (excluding unpaid orders) recorded a year-on-year decline in the mid-single digits, mainly due to the recurrence of the new crown pneumonia epidemic and its impact on most of the months of April and May. impacted by supply chain and logistics disruptions. In late May, as logistics capacity normalized, we saw that GMV was recovering, driven by strong support from merchants and loyal consumers for the Tmall 618 Ideal Life Carnival Season (Tmall 618). Tmall 618 achieved a positive year-on-year growth in payment GMV, and we also saw that the purchasing power of 88 VIP users was very strong.
Affected by the negative impact of the new crown pneumonia epidemic, the payment GMV of important categories such as apparel and consumer electronics decreased during the quarter. However, we continued to observe growth in consumption of health products, as well as interest-based consumption such as pet care, collectibles and outdoor gear. Despite short-term challenges, consumers on Taobao and Tmall continue to achieve high retention rates, especially those with higher spending power. For the 12 months ended June 30, 2021, approximately 98% of the annual active consumers who spent more than RMB10,000 per person on Taobao and Tmall continued to remain active in the past 12 months. In the 12 months ended June 30, 2022, over 123 million annual active consumers spent over RMB 10,000 each on Taobao and Tmall. As of June 30, 2022, we had 25 million 88VIP members, each with an average annual spending of over RMB 57,000.
Taote provides us with a platform for cost-effective products, continues to enrich product offerings, and enhances the digital consumption experience of consumers in underdeveloped regions. Specifically, Taote has been helping more and more factories sell directly to consumers (M2C) on Taobao and Taote. In the June quarter, payment GMV generated by M2C goods on Taobao and Taote increased by more than 40% year-on-year. . In this quarter, Taote’s loss was significantly narrowed year-on-year and quarter-on-quarter by optimizing investment in user acquisition and increasing the average consumption of active consumers.
Taocaicai is our business of providing consumers with the next-day self-pickup service of fresh groceries at self-pickup points in the community, and has quickly entered areas with high population density and considerable purchasing power. In the June quarter, Taocaicai’s GMV grew rapidly, exceeding 200% year-on-year; while losses only increased moderately compared to the same quarter last year. In addition, driven by the optimization of pricing strategy, the improvement of purchasing capacity and the reduction of operating costs, the loss of Taocaicai narrowed significantly QoQ.
For the quarter ended June 30, 2022, our direct sales and other revenue increased by 8% year-on-year to RMB64.714 billion (US$9.661 billion), mainly due to the benefits of online purchases at Hema, Tmall Supermarket and Sun Art Retail Food, groceries, and FMCG recorded strong growth, partly offset by weaker offline sales due to the COVID-19 pandemic. During the quarter, Hema and Sun Art’s online sales accounted for 68% and 36%, respectively. With our multiple direct-operated businesses and on-demand delivery facilities, we believe we will be better positioned to meet consumers’ growing demand for on-demand delivery of food, groceries and daily necessities in the future.
local life service
The Local Living Services segment includes the “to-home” and “to-destination” businesses. For the quarter ended June 30, 2022, overall orders for local living services decreased by 5% year-on-year, mainly due to the decrease in Ele.me catering delivery orders due to the repeated outbreak of COVID-19 and the impact of epidemic prevention measures, partially offset by Ele.me Steady growth in non-meal delivery orders and strong growth in AutoNavi orders. During the quarter, overall segment GMV declined year-over-year, but monthly performance improved as the impact of the COVID-19 outbreak subsided. In June 2022, overall segment GMV recorded positive growth.
rookie
For the quarter ended June 30, 2022, before offsetting the impact of cross-segment transactions, Cainiao’s revenue increased by 7% year-on-year to RMB 17,292 million (US$ 2,582 million), mainly from the provision of logistics to the Group’s retail and commercial business in China Revenue from fulfillment solutions and value-added services increased, partially offset by lower revenue from merchants in the international retail commerce business. During the quarter, 70% of Cainiao’s total revenue came from external customers. After offsetting the impact of cross-segment transactions, Cainiao’s revenue rose 5% year over year to 12.142 billion yuan ($1.813 billion).
Cainiao continues to expand its international logistics infrastructure by strengthening its end-to-end logistics capabilities, including eHubs, trunk lines, sorting centers, and last-mile delivery networks. In July 2022, Cainiao has a new international sorting center put into service in Israel, bringing the total number of overseas sorting centers in Cainiao to ten. To improve the delivery experience for consumers around the world, Cainiao continues to build and invest in capacity and enrich its value proposition for cross-border merchants. For example, this quarter, we added smart locker capabilities and made complementary acquisitions to enhance our presence in Europe. Last mile delivery capability. As of June 30, 2022, Cainiao had more than 7,700 smart cabinets in service in Europe.
In China, Cainiao continues to expand value-added services, including home delivery services, and enhance consumer experience through Cainiao Post, which complements its commercial business in China. As of June 30, 2022, about 70% of Cainiao Yizhan were able to provide home delivery services to consumers (excluding rural areas and universities, etc.).
cloud business
Our cloud business segment consists of Alibaba Cloud and Dingding. For the quarter ended June 30, 2022, before offsetting the impact of inter-segment transactions, our cloud business segment total revenue, including revenue from servicing other Alibaba businesses, was RMB 23,938 million ($3,574 million) . For the quarter ended June 30, 2022, total revenue after offsetting the impact of inter-segment transactions was approximately RMB17,685 million (US$2,640 million), an increase of 10% year-over-year. The year-on-year growth in our cloud business segment revenue reflects the overall growth recovery in non-Internet industries, mainly driven by financial services, public services, and the telecommunications industry; some from a leading Internet customer has been gradually stopped due to non-product-related requirements. Its international business uses our overseas cloud services, as well as onlineeducateThis was offset by lower revenue from customers and lower demand from other customers in the Internet industry in China. For the quarter ended June 30, 2022, customer revenue from non-Internet industries accounted for 53% of Alibaba Cloud’s total revenue after offsetting the impact of cross-segment transactions, an increase of more than 5 percentage points from the same period last year.
Digital Media and Entertainment
In the June quarter, Youku’s average daily paying users increased by 15% year-on-year, mainly driven by premium content and continued contributions from the 88VIP membership program. Youku continued to improve its operating efficiency by prudently investing in content and production capabilities, resulting in a year-on-year decrease in losses for the fifth consecutive quarter.
Appoint independent directors
We have appointed Li Yunlian, Executive Chairman of Hysan Industrial Group Limited and Independent Non-Executive Chairman of Hang Seng Bank Limited, and currently serves as independent non-executive director of a number of companies listed on the Hong Kong Stock Exchange and Shanghai Stock Exchange, Wu Gangping, former chairman of Ernst & Young China, is an independent director of the Group’s board of directors. Following this appointment, our Board of Directors has a total of 12 directors, including 7 independent directors.
share repurchase
During the quarter ended June 30, 2022, we repurchased approximately 38.6 million American depositary shares (equivalent to approximately 308.7 million ordinary shares) for approximately $3.5 billion under the Company’s share repurchase program. As of June 30, 2022, our common stock outstanding was approximately 21.2 billion shares (equivalent to approximately 2.6 billion American depositary shares). Our entire $25 billion share repurchase program is currently in effect through the end of March 2024. As of June 30, 2022, our share repurchase program had an unspent amount of $12 billion.
