Q1 2021 Alibaba Group Holding Ltd Earnings Call (Chinese, English)
At this time all participants are in the listen only mode.
After managements prepared remarks, there will be a question and answer session.
No I turn the call over its Rob Lynn.
It does investor relations with Alibaba group.
Please go ahead.
Good day, everyone and welcome to Alibaba groups June quarter, 2020 results conference call.
With us or denotes all chairman and CEO.
<unk> Executive Vice Chairman.
Have you Chief financial Officer.
This call is also being webcast.
Section of corporate website.
A replay of the call will be available on our website later today.
Let me quickly covered a safe harbor.
Today's discussion will contain forward looking statements. These forward looking statements you all inherent risks and uncertainties that may cause actual results to differ materially for not current expectations.
A detailed discussions off these risks or uncertainties. Please refer to our latest annual report on form 20-F, the other documents filed with the U.S. FCC.
Now on the web cell phone call stock exchange.
Any forward looking statements that we make on this call our base assumption as of today and we did not undertake any obligation to update these statements except as required under applicable law.
Please know that certain financial measures that we use on this call such as adjusted EBITDA adjusted EBITDA margin adjusted EBITDA adjusted EBITDA margin.
Marketplace based qualcomm's adjusted EBITDA non-GAAP net income non-GAAP diluted earnings per share or ABS and free cash flow I expressed on a non-GAAP basis, a gap results and reconciliation.
Oh GAAP to non-GAAP measures can be found in our earnings press release.
Unless otherwise stated growth rates of all see that metrics mentioned during the call refers to yeah, yeah, well versus the same quarter last year.
In addition, during today's call magical will give their prepared remarks English a third party translate I will provide similar team is try to Chinese translation.
Another conference last.
Please refer to our press release, what details then that you're in a session. We will take question your book English and Chinese and third party trying to say that will provide consecutive chess let's translation.
Oh translations, our four come yes purpose only indicates a discrepancy.
Imagine a statement in the offshore language will prove out with that I would now.
Turning to call to Daniel.
Hello, everyone.
<unk> earnings call today.
We have delivered another strong quarter.
Oh, the global community confused continues to struggle with uncertainties surrounding the economic.
We have seen encouraging signs of recovery in China.
Effective management.
<unk> outbreak in Boston on the country.
Colby 19, [laughter] Saturday to digital transformation of consumer behavior.
Operations.
He Barbara <unk> <unk>.
But most of our businesses, including coal Commerce cloud computing.
Covered under assumed healthy growth.
The pandemic has fundamentally altered Hello my quick.
Argument everyday life.
But it has also introduced new opportunities.
Digital adoption and transformation.
The prevailing trend in this change landscape.
And we are confident that we create how do you talk about future by capitalizing on opportunities Im just trying to environment.
Just as we did in Tucson.
Three during sauce.
In 2008 going to global financial crisis.
You mean.
And it.
2020.
I'd give consumers all are trying to read your Maki places reached 742 million.
<unk> quarterly net increased 16 good.
I may use Oh, we're trying to reduce <unk> reached 874 million.
Increase of 28 million since March.
These numbers reflect how both continuing strong consumer my ship.
Healthy user stickiness and engaging user experiences.
Worlds, leading consumer community.
Shimon physical goods GMB, excluding unpaid orders.
27% year over year with all major categories growing I could see me to foster right.
Relative to December 2019 quarter.
Hello.
<unk> <unk> offerings and engaging user experiences.
Contributed to higher purchase frequency as well as higher R&D spending per customer across all city tiers increased both <unk> and <unk>.
In terms of user acquisition.
We continued to increase our penetration.
Okay.
How about deals our new mobile.
Targeting body conscious consumers.
Reached 40 million and that you engine.
The disruption international tourism.
Presented an opportunity for our equal commerce business.
See more global.
Leading cross border <unk> platform in China.
40%.
I think G.N.V., excluding unpaid borders.
Looking forward I was trying to retool Maki places will focus on the wanting serious.
Number one continue to drive use acquisition, especially in left him up to pockets.
And work towards reaching our midterm goal of serving more than one getting Chinese consumers.
I'm a two.
Continue expanding our product supply.
Especially in categories currently under penetrated by E Commerce.
And number three continue to enhance the shopping experience.
And the pop to purchase all platforms through new content formats, such as like streaming and shopping news.
Our investment in new retail over the past several years, how well positioned our schools business.
Last week business, three Shapell Cmos supermarket culture.
Capture.
Hi, Chris apparently the growth opportunities.
The economic.
On a continued to see healthy growth momentum in the past quarter.
More than 60% of Reshuffles GMB came from online and the schools, which have been <unk> operation for more than one you're enjoying double digits things still growth.
Seamless supermarkets, how they.
Delivery services, which leverages, our store based England trees.
King widespread popularity among consumers.
And helped Sunmarke increased consumer reach and create incremental services.
We enable.
Ultimately, 15% of some our total revenue during the June quarter.
<unk> successfully roll out an important branding upgrading July.
The new brand proposition.
Anything you love we did ever.
Represents the transformation.
From a foot at every platform into a comprehensive digital my local service platform.
In addition to food and beverage.
One of them on now also delivers everyday necessities Suntrust gross rate fresh produce medicines and flowers from local merchants.
In the June quarter, <unk> achieved positive unit economics, as a result improve operational efficiency.
Also received positive <unk> GMB growth.
Signaling healthy recovery of the business.
We also saw promising early stage, resulting from a strategic club crop cooperation with body pay.
During the past quarter, approximately 45% of new customers ordering food delivery <unk> was contributed by the RTP mobile app.
We will further deepen the corporation, how do we believe our significant potential for value creation by combining <unk> the power off in car audio ballpark for system.
Capture opportunities that will emerge from the ongoing digital transformation of the food and beverage hundred retail industry.
We will continue to invest in this area.
Now I'll continue to show strong progress.
Last quarter.
With all the volume growing more than 100% year over year.
A pandemic have significant thing Pat O'malley, South East Asian countries.
Converted many consumers into online shoppers.
We believe the increasing adoption.
My shopping is beneficial for healthy growth for veterans E commerce industry over the long term.
South East Asian.
Continues to be the strategic priority our globalization strategy.
In this highly competitive regimen.
The new leadership in place, we aim to build a sustainable digital business leveraging.
Technology to sub local consumers and the business partners.
During the June quarter on express our cross border export hockey place. So order conversion an updated every time.
Negatively impacted by challenges in cross border logistics.
But the situation has started to improve in July.
How do you public dot com and 168 dot com to all our oldest businesses.
New market opportunities this year.
Many international whole set us have turned to Alibaba dot com to source products from China.
Global supply chain, what disrupted Chinese factories, where the first <unk> production.
In June 30, active buyers oddball about dot com increased over 100% year over year.
168 Dot com also so more than 50% <unk> growth in daily active buyers as a result of increasing number of <unk>.
Specialty smaller retailers looking for supply as Chinese economy reopened.
The pandemic has also transform the way until prices work.
Celebrating the then for cloud infrastructure services.
According to Idcs latest report.
Cloud maintained its position as the largest public cloud service provider in China.
Which is a testament to all the public cloud strengthening market leadership.
In the June quarter, our cloud computing revenue rose, 59% year over year.
King sectors, such as Internet financial services consumer retail and a public services.
The cloud not only provides infrastructure as a service, but also give up develops industries specific technology and the business solutions to address real world application.
Requirements for our customers.
As office just on the schools opened in China.
Think pocs D.A., you moderated from the peak level.
But remained over 100% higher than Creek Colby 19 levels.
Approach to work and education have changed fundamentally.
I don't think talk will be the important digital collaboration platform for working on the learning moving forward.
Acting all industries two services on cloud.
For our digital media and entertainment business.
<unk> daily active subscriber base increased by more than 60% year over year during the quarter witnessed release of popular TV series.
But writing shows.
Seem to like cinemas thought it to gradually reopening China.
Ali Baba Pictures has been preparing for business to the soon.
We are closely monitored the pace of recovery.
Recently, we decided to stop the operations of you see web an initial innovation initiatives in India. After extensive review of the business.
We don't expect it to have a material impact on the group's overall financial performance.
Today, we face uncertainties from not only the global economic but also increasing tension between U.S. in China.
As the world's largest E commerce platform.
The bus primary commercial focus in the U.S. is to support American immigrants retailers small businesses and the farmers to sell to consumers and trade policy in China as well as the other key markets around the world.
We believe global trade will continue an oddity Papa active pursuit of our mission to make it easy to do being anywhere off line with the interest of both China and the United States.
We are closely monitoring the latest shipped in U.S. government policies towards Chinese companies.
Which is being very fluid situation.
We are assessing the situation and any potential impact carefully and already and it will take necessary actions to comply with any new regulation.
Now I will turn it over to Maggie who will walk you through the details of our financial results.
Thank you Daniel Thank you everyone for joining us Tonight.
I'd like to review our financial highlight for June quarter.
We delivered a very strong start to our new fiscal year.
And they use.
In general is 874 million.
Quarterly net adds Oh 28 million and you active consume actually was 742 million a quarterly net adds 60 minutes.
We continue to acquire new users and consumers from less developed areas of China, reflecting our ongoing success in broadening <unk> product offerings to meet different demand.
The purchase frequency Senate spending for our consumers coming from last year that he thought of it areas also continued to cook.
Our total revenue was 154 billion RMB up 74% year over year. The increase was mainly driven by a robust growth of China, commerce retail and cloud computing businesses.
Our domestic core commerce business has fully recovered from the koby Nike impact as showing strong growth.
Computing revenue grew 59%.
Our free cash flow in June quarter increased by 39% to 36 billion RMB, our strong profit growth and cash flow enables us to continue to strengthen our core business and in that part longer come close.
Now, let's move onto revenue in T. tell us.
China Commerce retail good 34% year [laughter] customer managed revenue grew 22% primarily due to increased revenue contribution from search related revenue as well as new monetization formats.
This new format include recommendation fees and.
It seems like life's Jamie.
We see number of paying merchants and sending her merchants both increased.
Commission revenue was up 17%.
Commission revenue growth was primarily driven by solid under 7% well in chemo physical goods Payce handy.
Got you tend to growth that's commission revenue and T. Mosys Coke, that's paid a T N equals, let's mainly because a faster growth FMCG and consumer electronic categories that happened Zeller blended commission rates and also because that's our initiatives to support out merchant customers, including our wafer of and.
Seven seas, <unk> first half of Twentytwenty.
Revenue from China grew 54% year over year. This is primarily caused by fast growth cost up all their businesses such as team. Okay. Helpful. Supported by increased adoption wholesale that's how I know services.
Revenue from local consumer census was 7.1 billion RMB up 15%. This is due to increase your average order value and ongoing recovery.
On T. month deliberates, yet equally.
Unit economics are all there for the 19 months delivery business. This was positive during the quarter, reflecting improved delivery network efficiency as well as hence marketing efficiency that leverage our consumer insights technology.
This has led to forget Mary Anne losses.
Here at the local consumer service.
Our merchant acquisition continued to accelerate.
For the local consumer services.
I'd clog continued strong growth similar to show, 59% Yahya growth in revenue and at the same time the losses continued to be narrow it. So our average revenue per customer continue to improve and or the cost services.
Across as growing there well.
So for D.N. innovation initiatives.
One thing worth to mention about is that our online gaming business, which lets develop the from acquired businesses has been growing well say it is not recognize as part of that the M. you second in it.
Cool into sizable revenue and use our scale and what's most out of that and cubit or a wish you see on innovation initiative a second it.
[noise], let's take a look at our cost trends.
Cost and expense growth generally kept pace or was slower than revenue growth, reflecting ongoing improvement in operating efficiency.
The savings from operating efficiency improvements were reinvested into strategically important businesses with strong long term growth potential.
Let's move to segment reporting.
We continue to enjoy solid revenue growth by segments the strong possibility.
Let me find the corpus and this enables us to last for a future.
Core Commerce segment market based core commerce possibility.
So strongly to 55.5 billion RMB up 8.7 billion RMB year on year developing businesses, such as local consumer service Lazada, new retail and tiny.
Oh showed strong operating performance and improved operating efficiency.
The combined losses of these development business is wasn't narrow it by 1.5 billion RMB, two 4.2 billion RMB, which contributed to the 25% you could talk close of the overall <unk> Commerce segment.
How computing, we talked about the last March and when there are two or 3%.
For digital media and entertainment, we continue to focus on reducing losses, you COO through content cost control, while increasing paying subscribers well [noise].
Losses reduced it by about a billion RMB or in year, two 1.3 billion for it yet Mi segment.
Innovation initiatives and others.
The increase the losses were primarily due to our investment in seeing talk a businesses and also auto Navy Ford user expansion as well as the on technology Ah research and innovation.
So overall, our business continued to deliver strong profit growth with improving efficiency at the same time, we use our incremental profit to continue to eat that.
Back to car business.
So a june quarter free cash flow and Capex.
Our businesses overall continue to show strong profitability and cash flow.
As of June 30 is.
Cash cash equivalents and short term investments or 382 billion RMB.
I wish to oversee typically you I thought or for the quarter.
Free cash free cash flow was 36.6 billion RMB, which increased by 39%.
Mainly due to our robust profitability growth.
So Jim quotes or other financial metrics.
A share of 3000 to equity method investees in the quarter was 349 million.
We record our share of free south of all equity my thinking that he's one quarter rare.
Yes for this June quarter earnings were recognizing RMS Tees March quarter share offering salads.
That you can tell that the and Scoop has performed well in March quarter.
The Koby 19 pen dynamic has cost widespread disruption to the economy, which has and could continue to impact our investee companies.
[laughter], So june quarter a gap.
To non-GAAP net income reconciliation as shown on this page.
And it's a south explain.
So looking ahead, China has managed to a pandemic at at the whole processes manage their law and the economy recovery. There quickly. The ARPU has benefited from the overall China's recovery as well as accelerating rate it digitization of our cost.
Yes.
Oh core and new businesses, Oh develop the well this allows us to happen <unk> my pageant drivers for revenue and profit growth.
Our strong profit growth will make it possible for us to read that.
We will continue to reinvest our incremental profits back to our businesses and continue to expand our market leadership in various areas.
Before our Q and they session, we would like to announce that our investor day, well be house on September 20, Eightth two third here.
This time it will be a virtual one.
Due to the pen dynamic.
Limitation on travel people. So we hope to provide in that business updates as we did in previous investor days.
Details will be posted on the investor relationship section of I don't know who's website.
Now we can open up for questions. Thank you.
[noise] late.
Welcome to ask questions insurance, where English.
Part of Trinseo will provide consecutive interpretation for acuity session.
I imagine would address your questions.
The language you asked.
No that is from stations for convenience purpose only in the case of any discrepancy.
Management statement into origin language.
Okay.
Hi, Joe Hall to human <unk>, claiming yonah someone quote you once you win.
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Operator, please connect speaker and I say conference right now.
Please documented session when ready.
Ladies and gentlemen, who will now begin to question and answer session. If you wish to ask a question. Please press star one on your telephone now I'd wait for you need to be announced if you wish to cancel your request we present the found our house.
You get more people the opportunity to ask questions. Michelle you know more than one question at a time.
Again, it's sarwan on your telephone adweek screening.
Your first question comes from the line of Eddie Leung from Bank of America. Please ask your question.
Thank you take when you're talking to a woman on T.N.
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You quit we talked about something Mike.
Yeah She's you.
Thank you my question is given the existence of several large E commerce platforms in China in parallel all of them are already being a considerable scale.
Meaning that there are bound to be some consumers who are on multiple platforms simultaneously.
The question is in the future what consumers are under what circumstances and with respect to what products do you see specifically coming to Ali Baba spot for us.
[noise] Oh, what I said I think it wouldn't you owe to choose the Ali Baba Lojack woman due to the China retail market. This is a woman she was a we'd shellfish people. The so you could so the you could food has yet to the bowl cool off some food or something all core you'll genes only the joggers bolt.
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LTPS <unk>, but we'll meet with liquid tissue that shouldn't be.
Thank you I will answer that question.
With respect to Ali Baba as China retail market places for consumers are what we offer as an integrated service experience with the widest richest product assortment.
With highly competitive pricing.
With excellent service services provided presale during sale and post sale.
And therefore, we're already positioned to meet the needs of all kinds of different consumers in different categories. That's why Alibaba is the number one choice for online shoppers in China, and we'll continue to keep working to keep that [noise].
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[noise] certainly from the merchant perspective, we have a T mall, where brands make their goods available to consumers who can buy.
Goods in particular, new goods directly from brands. We also have top outward goods are made available through many different channels to consumers, including though with direct sourcing from a from origin, including an agricultural and food products.
So the factors that we could meet a whole range for the full range of different needs and demands from consumers are both in terms of different categories.
ER products and also a in terms of Oh. The range. You know you can have some consumers who are more affluent ah, but they could be also looking for value for money offerings, but in other cases they'll be looking for products are higher quality level of service so our intention.
Is to continue to provide more options and to meet needs a in all of those different areas.
<unk>.
Did you then thank you.
Your next question comes from the plane of Alicia Yap of Citigroup. Please ask your question.
Hi, I'm good evening management, thank for taking my questions on congrats on the solid results. All my questions. This on your international retail business, especially in the Dod off a what do you feel they does deal for the E. Commerce evolved from one in southeast Asia regions, what are the differentiated approach that you.
Hi off your competitive strengths and any areas that you'd think that rooms to change will improve that you foresee a how the landscape evolves and you know as compare to China and a in the region and how does that I will position that thank you.
Uh Huh, Oh, gosh any material would have to you and yet to.
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Either lazada, you'll reach what who some younger push we don't see much [noise].
[noise] censorship. Let me also this question I think because as I've said in my script the cells in Asia market is seats, because our strategy strategic partake Oh for our people bus globalization strategy and I think the when we await when we.
Look I thought I would resolve does operation. We are we expect to build a more pet food and cooling a sustainable business. After today in this market or the company competitions, various extensive and the people in but.
And Oh, it was and even something feisty buyers sellers, even shipping fees and trying to get the short term growth, but we we strongly believe we need to build a long term sustainable business and the so our advantage is first is about Ali Baba technology infrastructure and.
Specialty our experience that don't hall and technologies are being.
In the <unk> in the in the in the search and recommendation and the other supply and demand match the kind of them I think a this is our what big advantage and we.
<unk> top lazada us because this transformation.
Oh, we are well also.
Today, we are today, gaining the benefit from this I mean technology implementation.
Second I think a we up as a as part of the bulbous operation, but we have a big advantage opt to supply.
The South Asia market with the we've got goods from China and from other countries today, a true we because all those another I said it business Party Barbara I should this is part of volleyball Global network and the will play into it so not only from local to local but also try not to southeast Asia and.
And other countries to southeast Asia and at the end up they I think a we're trying to build a global not a global network and to sell anywhere by anywhere.
And Oh, <unk> I think that today for Lazada. We have we also have different segments that we have our lost more all four up four brands operation and the and the which provide a high quality products directly from the brands and with good fulfillment did it was services we have.
Our last Uh huh.
A lot of marketplace, a which is more like a a small b to C or even see two seats and as I said before we have like large global which is cross border business from China and other countries. We will continue to invest and enhance the position of each off the marketplaces and provide a integrated expense.
In two of our customers on us to that.
Oh Dear friends on the between.
China market and assessing the Asian market I would say I think maybe the big biggest difference is that actually in being so close in Asia. So.
So from that where it's never a popular and that Rob copal vary in Golden players in this market.
The merchants also loves to to interact with customers of our social network. So how to leverage the power all social networks I think it's a very important.
Go to us so actually we have done a lot and we'll continue to two to do further since you.
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Thank you Daniel.
Your next question comes from the line as Binnie Wong of HSBC. Please ask your question.
Good evening management, congrats on the first essential quota and also on his assessment you. An 18 shopping festival question is on D. autologous missile and use that he was used to launch a shock video channel I'll, just strings into ecosystem and while Oh, even on the other side also talking about expanding E commerce business I'm, making it close loop Oh so.
Question is how do we differentiate when we talk about this I live streaming and shot the deal I guess into terms felt like social commerce, and how do we but to help merchants to sustain the relationship among other customers and so far do you see you live streaming as cannibalize or incremental to merchants marketing budget on Alibaba.
Thank you.
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Okay, I think first of all cobalt deals hobbyists value cautious customers by offering a high quality products.
Hi, quoted oh sort of high quality and value for money products. So I think that part or the color palette customers, but how about deal as a tree is very very clear.
And as part of the.
Consumer experience in Kabul deal mobile.
We launched the shop <unk> shop live streaming and short form video I think but this.
This is not a a feat.
Yup.
Hey.
Pete I mean, the user experience is part of the consumer interface, but it's Oh I think a we are trying to give factories and supplies a tool for many their customers and also trying to give customers different experiences endeavor consumer journey on cobalt deal, but I think the primary goal is still.
ER segment, the palbo deal or with the value for money caught up and Oh low end customers. A this is Medicare and the short form video just a a consumer feature and this will highly integrated with the whole encrypting hard core consumer journey.
How about deal mobile app and in terms of the Oh, well the live streaming activities in although the other clear, including Oh, you mean, I will say a cheap for our merchants I think live streaming is eight it's more likely event marketing and.
Oh actually <unk> in there as part of the incorporation and people can take any possible for people to do seven day 24 hours or Lifesci me and older ways and if you looked at a tito's all alleging today actually most of the.
Merchants are viewed it as a way to do promotion and acquiring new customers, but they do need a a sustainable and they do they all patient problem, which is like.
It is Ali Baba platform. So that's why a lot of merchants. They they think they build a there are still from all possible and they operate are they trying to bring all the concern because all the consumers customers from from from a different I mean waste ought to tell ball and because of this.
Give them a best way.
Two allpoint and that there's also gave them a highest oh right in the operation.
And Oh for.
Paul Ball live streaming I think we also.
Introduced live streaming in Paul ball, and how about deal and as we disclosed.
That's the G.N. knee from a whole blood screening or tripled I mean in this quarter.
I think though I think this is already is a very important I mean consumer feature but that's the whole that's part of consumer experiences and [noise].
Because all the incremental traffic generated from the public life, Jamie we also identifying opportunities new opportunities for money piloting this humming additional topic in our public luxury me, so but once again, but this money position model, there's not a isn't it's not the <unk>.
Separate one as part of that whole solution imposed solution. All we provide follow merchants, who manage the customers Oh no all platform.
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[noise] [noise] operator next question please.
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Operator next question please.
[noise].
Next question comes from Mark Mahaney.
That's your question.
Okay. Thank you I just wanted to ask about the Ali cloud business can you talk about the sustainability of growth. A there are there particular industry verticals that are you recently seen be more aggressive in terms of cloud deployments and just talked about what's happening in terms to the.
Competitive dynamics, whether a pricing remains relatively consistent a you're seeing more aggressive pricing in the industry. Thank you very much.
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Called is a fast growing business Oh, <unk>, if you look at our although our revenue breakdown.
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And the we strongly believe that sooner or later older business, we'll move to <unk> to cloud.
And so that's why are we do see the fast growing gross.
The fast growing or we do believe the fast growing or will continue.
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He intends all that up.
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So the people who will take the first doesn't move focused of course is from the Internet company, because all the Internet company or even the operation.
<unk>.
Actually could be a followed by cloud so internet is very important sector, but in recent months, a we do see the fast growth off from other sectors, including like a financial services like a consumer consumer retail and even like a public sectors like.
<unk>, a power and utilities sponsor flows so up but we do believe.
He's doing a early stage.
The as I said before no we don't.
Wanted to just provide and public cloud, but in terms of A.A. <unk> Im looking for services. If we just do it at the end for service as a cost services them a price competition is evitable and then all the close of business more like a commodity business Oh.
Today, how do you all those clog as follows close intelligence services and it is about cloud crossed the power all the data usage. So that's why we but we we are we work hard to developer industry specific solutions, a with Austin Pos services together.
With our sauce partners and we will continue to do that to enhance our market leadership.
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The U.S. market.
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Operator next question please.
Okay.
Operator next question. Thank you.
Thank you your next question.
Thank you. Your next question comes from you So squad body from interest just ask your question.
Great. Thank you and good morning, Twoq very quick ones first seems like the recovery of being somewhat and even between higher income and lower income consumers. Daniel I was just wondering if you believe that.
As a result of this spend that makes there hasn't been a structural impact on lower income consumers and maybe how long it makes you're going to recover over time and second Maggie any update to the guidance that you had given the last call.
The total revenue in fiscal 2021 more than 650 billion RMB. Thank you.
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Okay. So around his guidance, yes, [noise], so we oh.
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Although were very confident.
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The recovery are full of Chinese consumption, I think assisted stay strong oh.
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Hi, I agree that to for the low cost people go income people I think they are up.
Well, if you look I'd Ericsson consumption behavior. That's they are they are.
That there's still some uncertainties because all the up because of they are actually more cautious about the future healthy economy. As you know that in China, a lot of low income people from the service sectors and today I think as compared to the physical goods consumption.
Consulting service sector still take some time to 40 recover and I'm. The employment in this I mean, a service sector also need more time to recover so I think this will bring some oh.
Sort of like uncertainties, I mean for the low comp or low income group.
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[noise] operator next question please.
Your next question comes from the line as Gregory Zhao of Barclays. Please ask your question.
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[noise] Ah. Thank you very much I'm delighted to have the opportunity to ask a question congratulations on a same quarter.
So we know that Oh.
China has produced a number of a global globally, leading internet giants or with a Ali Baba as are the most typical example.
And to these companies, including Ali Baba or at the front of the entire world in terms of developing all kinds of applications.
For the Internet, but when it comes to things like operating systems, or even semiconductors and ship China lags behind the rest of the world. So my question is does Alibaba have any longer term plans.
To invest in that kind of key infrastructure and ER as part of that there's all the Baba have planned to a higher mortality from international markets.
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[noise] Ah thank you.
Oh, he Baba has always been committed to a market oriented and user oriented development and we continue to invest for the long term in technology with those objectives in mind, we believe it all technology must be tightly integrated.
With the markets Ah Ah to meet needs in the market, we've done the with consumer facing technology and also with the cloud where we're not just providing infrastructure, where they're looking for ways to leverage on the cloud to help businesses enhance their operations and become more effective. So certainly this is our commitment we're committed to long term.
But that's doing research through our Dod more academy among others, but we do believe very strongly that research and development should be highly integrated in order to create value for society.
Thank you very much.
Operator next question.
Your next question comes from the line and.
Gene you some new Street research please ask your questions.
Hi, Good evening, Hey, Thanks for taking my question, maybe I think from your prepared remarks, you talked about a reinvestment back into the business the profits reinvestment back into the business can you just kinda talk about the scale and scope of kind of what that investments looked like in the duration and how we should be thinking about the rest of the fiscal year in time.
Comes off when some of these investments will hit thanks again.
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Operator could we have the next question please.
Thank you. Your next question comes from.
Colleen Sebastien form book.
Please ask your question.
Great Thanks, and congratulations on the quarter.
Two quick ones for me as well first off Daniel I think you mentioned that change in strategy in India. If maybe you could talk in a little more detail about the platforms opportunities in that market.
Then secondly, looking at the gap between the the mobile and they use and the total active.
Commerce.
User base.
The gap has increased the bids and I'm wondering if that's an opportunity overtime to engage those those mobile monthly users that are not yet active customers. Thank you.
Uh-huh specific trupanion, but nothing to further you could see two years.
We have two years ago I'm going to win T. Even once you know to some costs I'd tell you can you talk a nuisance I used to chime in here that you get charge. So I'm going on so we took hotel shopper realigning the tied into a should help you will show you quit.
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[noise] Oh personal Oh, I, just said, we decided to stop operations off you see web and other innovation initiatives a easier opt for our business review and.
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Believed that to globalization is our long term strategy, but near term I think a we oh, we are closely monitoring the a change off the Oh geopolitical environment and also the national policy of other countries and we will.
Oh.
I just our our strategies according to this changed.
For the second question I will say today, our our M&A, you and I see us do have a very strong growth given we have such a huge size of consumer base in China.
But I I think most important thing is that we have people engage with us that's the starting point and our if you look at our historical number like you will see that the longer or people stay with us at the most spending or are they will do.
The more consumption they would do and the more categories. They will consume so we will continue to engage with customers and the two convert or a visitors or the new customers into our royalty buyers.
In the long about.
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Next question please.
Yeah, I know going to take the last question.
Your last question comes from.
<unk> by <unk> from Goldman Sachs. Please ask your question.
Thank you for taking my question.
Congratulations on a good set of numbers, maybe I'll just take a step back and look at coded and the aftermath of co that I wanted to understand from you. If there was specific areas that you saw it increased opportunity as much.
And with that lead to a change in tactic. We didn't notice that you. A 618 did you were very you are much more aggressive added bore fruit very very quickly for you.
And we wanted to understand if those two can be read together and we can see in imagined so potentially a much more aggressive stance from you that would bear fruit over time.
My question.
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Grows very fast.
But I think that's not oil and we do see a lot of and increasing opportunities in FMC geez <unk> in new brands and also in many sectors and also from the our retail perspective, I think all the all the retail operations moving to the digital.
Sector, I mean moved to digital operation So how to.
Leverage the power of our new retail infrastructure to help these merchant to serve their customers even from a local basis.
I think this in a growing opportunity and the cloud Oh, We said many times and call is is a is a.
Big wave and we are still in the early stage in comes on the fast growing and Oh <unk> I think Oh 618 is as a met yet I'm paying as part of our and you I mean.
And you operation and a we think a we take a REIT approach and to meet growing up maybe that demand and grow emerging demand offer consumers I think post an anemic and also meet the demand other suppliers, who want to sell sell more products and deliver more services.
There are customers. So are we are happy to see that the results and we will continue to create value for both our customers and the merchants.
Yeah.
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To expand our market leadership at the same time, we also wanting that smartly across different smarty smartly means that you know were aiming and long term sustainable well, it's not that I, just you know temporarily acquire customers.
Andy So that's it and that's not gonna be focused now you certainly Ah well. It's also a engagement authentication are so.
I think smart I also means that we had a leverage resources on Oh, I got a economy, which includes osten.
And together or to grow our business.
Thank you.
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Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect your lines.
[music].