Q2 2022 Alibaba Group Holding Ltd Earnings Call (Chinese, English)
Good day, ladies and gentlemen. Thank you for standing by, welcome to Alibaba group to Congress for the 2021 results conference. Call at this time. All participants are only and only mode until the question and answer session. I would like to turn the call over.
Good day, everyone and welcome to algebra Bruce September quarter 20 21 results conference call with us are today are Daniel dong. Chairman CEO, jota Executive Vice chairman, Maggie you Chief Financial Officer. This call is also being webcast from the IR section of our corporate website. A replay of the call will be available on our website later today. Now, let me quickly go over to see if Harbor today. Speaks Russian make hunting.
Looking statements for looking statements involving hair and risks, and uncertainties that may cause actual results to differ materially from our current expectations, for detailed discussion of these risks and uncertainties. Please refer to our latest annual report on form 20f and other documents filed with the US SEC or announced on the website of Hong Kong Stock Exchange and a forward-looking statements that we make on this. Call are based on assumption as of today, and we do not undertake any obligation to update these statements.
Kept as required under applicable law, please note that certain Financial measures that we use on this call such as adjustable, adjustable top margin and just it, but I just did become urgent. Commerce is just a pit stop before strategic Investments. Now, I'm getting the income gap, diluted earnings per share or 80s and free cash. Flow are expressed on a non-gaap basis. I'll get results and reconciliations of the gaap to non-gaap measure can be found on our earnings press release.
Unless otherwise, stated growth rates are all stated metrics mentioned during the court, refers to year-over-year growth versus the same quarter last year. In addition, during today's call management will give their prepared remarks in English, a third-party translate that would provide simultaneous translation in Chinese on another conference line.
Line, please refer to our press release for details during the Q&A session. We will take questions in both English and Chinese and a third party. Translated will provide consecutive translation. All translations for convenience purposes, only in the case of any discrepancy management statements in the original language will prevail with that. I will now turn the call over to Daniel.
Thank you, Ross.
The one thanks for joining our earliest code today.
Day in the past quarter how deep are continue to firmly invest into our three, strategic pillars of domestic consumption correlation cloud, computing, and data intelligence.
We believe this will establish solid foundations of our long-term goal of sustainable growth in the future.
ER some contests on the China macro-environment. Before I share our business updates.
You know, September quarter trying to gdpr and consumption continue to grow, but slower than the previous quarters.
Has overall, retail sales is for the quarter increased five percent year-over-year online retail or physical Goods, Rose eight percent year over year compared to the nineteen percent. During the same period last year. Offline, retail has only just returned to the same level as two years ago.
Go. These economic had wings coupled by intensifying market competition, also affected our core Commerce business in China. In language industry, retail Trends, in China, physical Goods. Gmv over year growth rate, moderated to single digit. This quarter mainly due to a Slowdown and the general categories.
That said what was the rate of consumer electronics and Home Furniture in categories. Remain resilient?
Aunt in the challenging macro environment. We continue to invest in user acquisition that have seen promising progress in low, tier cities, which I will elaborate on later.
After our Global and active consumers, which approximately 1.2 forbidden, which is a net increase of 62 million quarter over quarter, and a 20% growth year over year this past quarter.
Oh, were AAC brought to 950 Street Mitten in China and the 285 million overseas.
He's, we are on track to deliver the one building China easy target by the end of this fiscal year and we remain firmly committed to achieving our long-term Target to serve to building consumers globally.
Lee, let me turn to our long-term investment strategies.
He's in less-developed areas. Cross-trainer top of deals has continued incremental growth to our overall user base and the stimulate more user activity and engagement. In our China consumer across system.
Paul deals. AAC surpassed 214 million this past quarter.
for close to half of Turbo deals, daily active users are unique, incremental users, in addition to topple app, use
Try to get by the value for money products and differentiated use experiences offered by. How about you at the same time manufacturers, take advantage of your one. Stop for service solution that includes online store operation, and fulfillment to sell directly to end customers.
So we call this solution and to see all manufacturers to Consumers.
Hours during this past quarter. How about you? I'm to see orders. Grow nearly four hundred percent year over year.
For our community Marketplace is business outside time. We continue to focus on investing in and the building a new digitalized Community Commerce model, that is sustainable and healthy Paul tries and has extended operations to close to 200 cities and it's a GNP growth surpassed 150%, CEO quarter-over-quarter.
We are deliberate in our approach and faithful to our belief in True Value creation, rather than blind pursuit of unqualified and unsustainable growth.
We are instead focus on leveraging core capabilities that are available has built over a Year's in the supply chain Logistics user engagement and the channel development. We aim to grow a new teacher for social commerce infrastructure that offer consumers quality services and products with highly competitive price.
Nice consumer, survey results have shown that product quality is the top deciding factor for consumers to choose topside, type over other platforms, has contributed to increasing the purchase frequency of our core Commerce, consumers.
More than 50% first-time buyers of fresh to use on our China retail Market places.
Has we believe the ultimate value proposition of the community. Commerce infrastructure is in our ability to elevate the quality of routine everyday service in local communities.
It ranged from guaranteeing supplies during supporting local farmers to to sell high quality produce.
Occasional training and job creation.
We will continue to enhance these services to create value for our communities.
He's in local Services. We are creating a product and service metrics centering around synergies between Paloma and fliggy for home bound and Unbound local Services respectively.
Hold on.
Deliver 29 percent growth, he sees and thirty percent growth in order volume v over here.
Here with none meal, delivery order, growth outpacing total order growth this past quarter.
ER, in addition to navigation Services, they might have been expanding into service offerings around the users Journeys and the destinations such as rotating hotel, bookings, Etc.
During the quarter transacting users of this destination services on a map increase more than two hundred percent year over year.
Oh, those are recent Resurgence of COVID-19 in parts of China impacted stability, in the supply of hotel rooms and the travel products. In many provinces. We see the positive contribution in user value from adding fliggy party supply to a map and other and our other user platforms.
So we just celebrate our 13th, November. 11, Global shopping festival with a record. Gmv of 54.0 Street building our and be exploding unpaid orders.
Representing the youth year over year, growth rate of 3.5% for the 11-day campaign.
I'm the stable and Healthy Growth of the high base over last year. Reflects China's consumption power and its namik resilience.
Looking forward. We remain confident in the development of China consumption.
Today, we already have the largest and the most valuable consumer base in China, with 953 meeting AAC, which are still growing. At the same time. We will serve our large and the Tigers consumer population to reuse segmentation addressing different needs and use cases through and an assortment of apps with decorated value propositions.
Food. That's record-setting of products and services. We will increase our user sickness water, share and overall retail penetration.
Even outside of China, we continued healthy expansion of our user base and revenues achieving 285 million aac's, and 33 percent Revenue growth during the quarter.
Are in Southeast Asia, Lazada produced, 82 percent year over year during the quarter with triple digit growth in Thailand and Malaysia?
Grendel. The largest e-commerce platform in Turkey deliver. Gmv, gross of over eighty percent year over year.
Express, gmv grows the saturated this quarter due to the negative impact of net, v80 rules in Europe, and the gradual recovery of the local supply chain and consumption, in its destination markets.
He's looking ahead. AliExpress will further, invest to expanding local operations in its strategic markets, in Europe.
Europe for our Logistics business. On your post, has achieved coverage in over 200 cities. As of the end of September. They have become our stations for consumer services in more than 100 counties and towns across less-developed areas.
The daily average package volume delivers for Tanya post increased nearly 70 percent year-over-year to 69 million during the quarter.
After, you know, domestic supply chain business, tonya's fulfillment, volume for top ordeals and to see business increased by more than two hundred percent year over year.
Here as part of its Global Logistics Network expansion, Tanya launched new initiatives to improve the user experience for international consumers by introducing self pick up Lockers in Russia, Spain, France and Poland, while continuing to enhance his cross-border Andrew and Logistics capabilities.
Last but not least are the public Cloud, delivered Revenue, growth of 33 percent year over year. This past quarter driven by strong Revenue, growth from customers in the internet financial services and Retail sectors.
In October, we held our 13th up Lazada conference, which is now the biggest technology conference in China, by attendees.
We unveiled several new proprietary products and Technologies upgrades including etn. 710 servitorship architecture.
Pancho Cloud native server series body, Barber Ai and Big Data platform and a new generation of Paula DB database.
Place these show that Ali Baba cloud is benchmarking against the world's top cloud computing Technologies and a milestone dates for perjury product capabilities in us and paas.
In September, we announced are initiatives and pledged to invest 100 billion RMB by 2025 to Advanced scientific and technological innovation, Economic Development, high quality employment, and vulnerable group supporting China. We believe these four areas are among the common focus of all responsible companies in the world under the ESG framework.
We will incorporate these technicians.
Into the social responsibility, pillar of our ESG strategy and hope that our digital Commerce and Technology. Ecosystem can contribute our part in these areas.
Looking ahead. We will continue to invest heavily into three into our three crows engines of domestic consumption globalization cloud computing, and data intelligence as we announced at the beginning of our fiscal year.
In Coal Commerce, we have started started to see encouraging initial results of our investment in low, tier cities, local services, and Logistics in the form of user growth and enhance the capabilities.
Our investment in globalization has also delivered progress in user base, consumption and revenue growth.
Both in cloud computing, in a better intelligence. We will strengthen our Market leadership by further enhancing, our core product and Technology capability.
No matter the challenges in the current macroeconomic environment and with more and more players entering into the industry. We remain very confident in our business strategy and and our future.
ER, we will continue to focus on capacity, building value creations and in multi-engine approach to growth.
With we firmly believe our strategy and the perseverance will bring mid and long-term returns to what customers and investors.
No, I would like to turn it over to Maggie who will walk you through the details of our financial results.
It's thank you Daniel. Let me share some high-level sauce on our financial results. First our Revenue growth continue to be strong and our revenue or becoming more diverse. If I'd so overall, we Booth Revenue by 29 percent year-over-year to 200 billion revenue of our International Commerce business and call Computing is a bit. Its robust growth 34% and 33% respectively.
It's just that you beat. I was 28 billion. So core profitability before investments in key strategic areas, remain very significant and stable at about fifty two billion. So I will talk about our investment areas. Later the decline of 13.2 billion RMB year over year in total, just the EB Tata is a result of our investment in strategic areas and Merchants support.
We have one of the most Diversified and loyal customer base in China. And then we believe these investment will further strengthen our position. And our overseas investment will also help us gain mindshare in many International markets in the future.
So here we provide a revenue breakdown size s. And where you can see that, I've advised evolved into a market engine gross company with businesses across different Railways, and that growth and revenue continue to be more and more Diversified cost friends. Now, let's look at our overall cost Trends. Excluding SBC as a percentage of Revenue.
Cost of Revenue ratio increase in September quarter due to higher. Proper proportion of our direct sales business. Mainly from the consolidation of stars is direct sales. Business will continue to strengthen our retail initiatives, especially in the development of our product sourcing capabilities. For example, Our Community Marketplace, business continued to grow rapidly, which is partially
Thanks to the strong procurement and supply chain capability in perishables fmcg, and General Merchandise categories of stars.
Sales and marketing ratio, also increased in September quarter due to an increase in marketing, and promotional spending for user acquisition and engagement for a mobile Commerce businesses. Such as how about you Lazada?
And also remain stable at four percent compared to the same quarter last year.
Look at our profitability and area of investment Commerce is just a TP top. Before key, strategic Investments was largely flat at fifty, two billion, reflected our support to Merchants as well as the increased spending user acquisition engagement our marketplaces. So if excluding our Merchants Support Program spending the growth of Commerce, adjust the easy top before key Strategic investment was similar,
To that of our CMR Revenue. Growth suggesting a relatively stable ebit, a margin of our China retail Marketplace.
I just ate you beat a decreased by 13.2 billion. The decline primarily reflect twelve point six billion a year over year increase in Combined, losses of key strategic areas such as how about the local consumer service Community marketplaces and Lazada within Commerce.
Let's take a closer. Look at the business program is revenue and profitability of our business segments during the quarter before. Okay, first are calmer segment revenue from our Commerce, 171 billion, 31 percent year-over-year growth. Revenue of China, Commerce business showing 14%
Three percent there are two key reasons for the slower growth of CMR. First. Our CMR goes were primarily tied to a single digit physical Goods. G m equals that resulted from growing market conditions and more players enter into the sector of the China e-commerce Market China. India statistics have shown us a Slowdown of overalls consumptions. We experience a
large larger impact, given our positions at the largest e-commerce player in China. Secondly, CMR grows was lower than physical Goods, gmv growth primarily due to the incremental year-on-year, increase in merchant support and subsidies revenue of international Commerce. Goo 34 percent year, over year was continued strength, Force International Wholesale. And
Charlie Company, this has such as Lazada alibaba.com, AliExpress and pain deal. How much does it decrease? By 12.7% the decrease? Reflect twelve point, seven billion. The secret reflected increased investment in those strategic initiatives.
Now these initiatives we invested within Commerce snorted where us business that strengthen consumer experience. Hands loyalty energies into a less developed area in China and further expand our presence internationally. So during the quarter, the business is Osho robust growth. How about you and paas high continue to penetrate into less developed markets of China?
And they extend our addressable Market. How about you achieve? The 248 million, AAC app, 49 million. How can I grow gme by over 150%? Cute? Kyungkyu as a reminder Community Marketplace business started early this year.
We're element continues to deliver strong and they were gateways for local service business with the with high-frequency, purchasing intent, but that on Trend, you continue to generate robust growth in New International Market, Lazada order who 82 percent year-over-year trendy of DME Grill over 80%. Yeah, year.
Let's take a look at the cloud computing business Revenue, growth, 33 percent year-on-year to 20 billion be doing this quarter, which accelerated compared to the June quarter growth. We're so strong Revenue growth from customers, internet, financial services, and Retail Industries. Are we Cloud generated? And I just think of 396 million given strong.
Quotes and knowledge.
Next, our DME business during the quarter was eight billion in revenue. And if you look at the losses is slightly increase year-over-year because the the Investment Company sexual, but overall they continue to narrow in losses in the first half of the fiscal year.
Income statement, selective initial Matrix.
Let's review some of these items interest and investment income with a loss of 11 billion. In September quarter primarily due to net losses, arising from changes in market, prices of our Equity investments in publicly traded companies in the quarter.
This is compared to games in the same quarter of 2020 in income tax expense in the quarter or six point 1 billion compared to 1.9 billion the same quarter of last year.
In the same quarter of last year, text expenses refused to by approximately 6 billion because during that quarter certain subsidiaries were officially notified that they were approved. As Key software, Enterprise status for a calendar 2019, which entitles them to a reduced, a great tax rate of 10%.
Aunt, share of results of the equity method, investees, with 5.5 billion during the quarter.
Here we show a Gap, a non-gaap net income attributable, to shareholders, besides the reasons we've discussed above the Euro of your decrease was also due to a lawsuit arising from the changes in market, prices of our Equity investment in publicly traded companies.
September quarter, free cash flow. We continue to have a strong net cash position as of the end of the quarter, our cash cash equivalents and short-term Investments, or 443 million RB, which is approximately 69 billion US dollar free cash flow was twenty two billion. Be
The decline was driven by decreasing the profits.
Before we go into Q&A. I would like to provide some perspective, our financial Outlook over the last six months. We have observed, a softer market conditions with floating consumption growth in China.
Slower than expected domestic consumption growth. Since we provided our Revenue guidance, in may, we not expect our physical 22. Revenue goes to the 20 to 23 percent year-over-year, the adjustment primarily reflects lowering of a Commerce revenues that include both direct sales and customer management Revenue.
Let me share with you a bit more.
Our investment and profitability. So firstly in China, we're seeing more players entering the e-commerce industry. Our peers are increasing Investments to acquire users and most of them continue to show a level of high level of spending. We will continue to invest in our e-commerce business that create value for consumers and Merchants, and keep our Market leadership position. And then
for the competitive strategy in longer term. Secondly, we believe our local service business still have a long-term potential. These businesses have generated strong transactions growth and high user retention rate, setting strong Foundation to compete for long-term. We're seeing robust yummy and user growth in our International Commerce business. These businesses.
Dot-dot-dot Trend. You AliExpress are exhibiting robust growth localization strategy, as well as our ongoing investment in Building Technology and Logistics capabilities. Lastly, we continue to expect exciting growth opportunities for our clock business that will benefit from digitalization industry, industrial internet era.
Seasons are significant profit generation and a strong balance sheet. We believe it is important to grow and expand into new addressable market for the long term. Dispatch near-term weakness in the last name, our current environment.
As such we will continuously invest into the apartments in areas and will report to you the business development progress down the road. We believe is business will continue to increase consumer mindshare polisher. That will be important to our long-term growth and value. Lastly, before we go to Q&A. We like to inform you, that we will be hosting an investor day on December 16th and
17 during the event, our senior management team will provide. You an update about that ski businesses and their these businesses long-term perspective. Prospects. The semester day will be
Unity to provide you with more details and insights.
Now, let's open the floor for Q&A. Thank you.
Thank you. Hi, everyone.
For today's call you are welcome to ask question in Chinese or English after-party translator will provide consecutive interpretation for the Q&A session management will address your question. And your language asked please note that the translation is for convenience purposes only in the case of any discrepancy. Imagine statement in the original language will prevail. I thought your heart can see that the you mean
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I think you and the you halfway down in the wind. She, I think you can would be entirely g.e.e.c, operator. Please next speaker and Si conference line now and I start the Q&A session, ready. Thank you.
Thank you.
The first question is from the line of farmers Chong of Jeffrey's United's open discover head.
I have a question regarding our. Do you initiate if you give them that time, how about do use to be doing a very good and we are seeing the AAC already 214 million so about regarding our deal.
The monetization to em up and on the other hand, over the long run. How should we think about the revenue scale of these? Are you initiate versus existing business? And second question regarding connectivity, given that you have been quite a while after we have been cooperating.
With RPS on connectivity about or the monetization potential that can be shared. Thank you.
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You willing to talk at a retail mission that. Yeah, she's food. Why is y'all were you going to be for me to call on you?
Okay, let me also the questions one by one for the first one. I think today. Our color party for towel, tied for fourth. How about deals and outside sir is to still to build the right. I mean, infrastructure in terms of the manufacturers to Consumers model in Cabo deal as well as pay a hyper local community.
Infrastructure, so I think these are our priorities and in terms of user engagement. We see very very strong user engagement in the past quarters, as you can see the AAC for top of deals, reached 240 million and forth outside time because this is a more like a additional service is on top of mobile app and talk about deals. So which also show a very good. I mean user.
Conversion to the fresh produce and the food categories. So we we are very confident that if we can provide value to the consumers as well as the manufacturers and suppliers of the, from the farmers. And the, we believe that we can find a very, we can generally also the value to the platforms as well.
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So looking ahead, I think for the for the value creation model, I would say it's not only like a Marketplace to monetize the traffic in the marketplace, but also we can see a strong potential are in the supply chain as a result of the supply chain optimization for the manufacturer to the consumer business as well as the farmer to table business.
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Yeah, for your second question of connectivity. As a, as we always a connectivity and open this other core value of internet, and we strongly believe that it will be a win-win situation. If all platform companies can increase openness and connect connectivity are in substance and not informed. So I think for us, we will continue to promote the nondescript.
Use a sharing and consistent across platform to make sure consumers have have the consistent user experience. Because today, if you are talk about users, you can you can, you may have the experience that when you want to share some drinks with your, with your friends in Social platforms experience is actually it's bad. So, I think this is for our mutual.
Benefit to improve that experience in in the when they try to try to do whatever they want cross ecosystems, and we will make we are, we are actually have already made the necessary preparations for the future interconnectivity.
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Thank you. Operator. Next question.
Our next question is from the line of addict CEO of JPMorgan. Please call ahead.
And thank you for taking the question. Does it do to both Mexico and the competition results tonight? And you guys looks like on the Performing the industry, peers in this quarter.
Extended due to competition for competition. What are the areas that you see the most pressure and the challenge? And the what are the strategies to regain competitiveness in those areas? Thank you.
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Well, if you look at the the the landscape actually today for e-commerce for the definition of e-commerce, actually, it's evolving. So today in the market. They are multi formats of e-commerce model. And as long as you have some traffic and you have a user with you and based on the public available, third party payment solution, and the list and delivery fast delivery.
Anybody can try something on e-commerce. So, but we strongly believe that our fourth. How about our advantage? Is that consumer, that consumer mindset and we are a purely a consumption destination for all the customers. So so we we will continue to develop multi features and applications in our in our
Topol app as well as the same time to segment our power, user group by different mobile apps for specific value propositions. And today, I think if you look at the, if you look at the market, I would say for the, for all the players. Actually, they are, they may address the customers, our needs from one angle, but actually for tobol, we are the only
The nation who can meet the customers.
Purpose from different to meet our customers different purposes for someone who have very specific shopping purposes. We can talk to them is position as a mobile as a shopping search. And also talked about has a lot of applications to facilitate people to enjoy the fun of Discovery and and over the years. We've built our our live streaming business as well as a short video.
Business and, and the social social content business. So, we are a platform with multi formats. I mean, consumer Journeys for people with different purposes. I think we will continue to invest in this and to give people most comprehensive selections and and the most efficient and guaranteed.
Consumer experiences.
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Of course, from macro conditions Comet from the competition actually, it's very difficult to quantify the impact. I would say. So that's why we believe that these two reasons are, oh, I mean, all the factors we should consider. Actually, we are because we are the market leader in a retail Commerce. So that's why I think our performance to some extent will reflect the
Market, I mean a condition
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Operator. Next question. Thank you.
Thank you for taking my question. Looking ahead. Your garden seems to suggest you.
And give us what you think is a normalized pace of growth for your business. And for China GMB in general to really focusing on great peopie, do much.
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Let me try to answer questions. Yes, if you look at our guidance and then try to derive the second, half growth for our Revenue indicates, a revenue growth at the team that comes that assumption is mainly based on the DME growth expectation.
And the impact on the revenue growth is the only place in the Commerce and China retail e-commerce. So we do think if you look at the total China TDP and consumption, I see this quarter compared to previous quarter in countdown significant, a to single digit. We see this may continue for the following cultures.
And we as the in size, the biggest player right now accounts for you know, we have approximately a trillion gnd verses 44, 45 of the total National gmv. So the impact will be largely on us and if you look for Yonder this year and in the following years, how is see it?
I think, first of all, our Revenue growth engine, now is already beyond the China consumption beyond that. You CMR so CMR if you look at the school very account for around thirty six percent of total revenue.
Where it used to be over 50%, several quarters ago. So, this is because, you know, all of these cloud computing, and international businesses tiny local service, Deo, start contributing and increases contributions, or who left. So this is where we talk about modern engine growth and continued to, to expect to see growth in these areas. At the same time within core Commerce.
So can you talk about our app strategy and talks about? If we look in the mid term long term, we don't believe the monetization kind of really coming from these, you know, traffic and GMB grows, but more from the instructor to the bility with. We were building and to enable Merchants. We don't have
Monty.
To communicate at this stage. We're sharing more later on. If you're a mess today, we are also going to share with you how we measure the value creation. And then eventually this is always our seems that once you know, Merchants a consumer stay. So so and retention rates here and they enjoy the service will find out ways to monetize. So if you look at the investment, we're making nowadays. We actually, this is Artie.
A Shinto to your lesson and to move towards our Target. First Target is the user base of over 1 billion in China. I think, in that aspects. We're pretty much on track. And then the multi a strategy makes the engagement of these users being enhanced. And then the merchant side. We have a lot going on in terms of merchant service provision, which
Also share next month. So the value creation and I eventually would be least a return will be there.
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Operator. Next question.
Thank you. Hi. Good evening management. Thanks for taking my questions. I have a question related to CMR and GMB. So the Slowdown of G the CMR, is it more contemporary and also a functions of gnd and have CMR actually experienced slower growth than gnb in the past quarter past couple quarters.
You know, we have been providing many service to support more traditional especially given is a tough macro. So if you GMB re-accelerate later, could CMR, we accelerate even faster, seems, you know, we have been still at the market eyes and, you know, the way that we can sort of create value for merchants. We can still add on, you know, to to, to the entire value chain for the merchants. So any colors that you
Could help us on, that would be great. And also in ways of gmv. Could we accelerate when the macro is recover? Is there any way that we are preparing to help us capture? When the macro recover we can actually further boost our G and B, you know faster than the macro recover. Thank you.
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Thank you, Alicia. Yes, you're right. The CMR Growers actually to some extent, I to the GMA growth and the past several quarters will seen that. CMR grows slower than the growth of GM V which is mainly due to our Merchants support programs. So if we have backed those Merchants support spending, then, the CMR goes this going to be
would have been pretty much in line with the GNP growth. So eventually if the China consumption grows recovered and gmv, growth comes back and get rid of accelerated. We believe that CMR goes will also be consistent with the growth of gnv, but in our view, when we look at the future Revenue component, we believe that all of these efforts we have
Making and you know, not only do you use sir base expansion, but also the services look like a live streaming. All of these, you know, secondhand and luxury products and a lot of supplies and also user experience, building exercise will bring value to Consumers. We should have new revenue streams coming into the total group.
Revenue pie. And so these will be adding to our future Revenue growth.
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Yeah, let me add a few words are on the, on the question. Actually. We are always make ourselves ready for any new market opportunities, and even more, we are always trying to do something to do anything. We can to create new market opportunities. I think today, if you look at the landscape the Ecommerce actually account for like 20 to 25 percent of the total total retail, but if
Look at the penetration rate by categories, actually, it's it's various. So I think it's still a big room, 22 first prize the existing. I mean total retail, but furthermore is to create a new team and by leveraging the power of technology to improve the efficiency of of the supply and demand. And also,
Create a digitized. Retail formats, no matter, it's online or offline or integrated through to get people's period, Superior experiences to to to unlock the potential of consumption, so we will always try to innovate and incubate new animals and to capture these new opportunities and even create new opportunities. Thank you.
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Next question.
Are concentrating to the top ql. Think about how should we think we've trained going forward? Are we going to Balinese the support and the traffic between the top two and the longtail? Kol and you call? It would be very helpful. And the second question is regarding to the personal information Protection, Law impact. Are we saying anything it can impact to our CMR business? How should this change in the future? Thank you.
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For your first question for live streaming. Actually fought for streaming today is a very very important. I mean applications in our in our mobile taobao and we observe that for a lot of fences and customers they they love seeing this live streaming format and but we don't view this live streaming as a independent application, but part of the
Some application to enable set it to engage with the customers through themself, through their own stores, or through the pale else.
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It seems, you can comfort. Those who don't can you treat your 1040? See? Who don't like. You take a shower. Yeah, if you look at the ecosystem in live streaming business, actually, we we do have some top players. They have because a very good popularity among your friends, but at the same time, we have many POS else. S here foot here and many UK else and leave the most
The the very unique I mean situation. In top of mobile app in Cabo live streaming is the store on live streaming which initiated by the store Operator by the sellers, even by the by the stars and associate in England seller. So I think we provide a very Dynamic. I mean, ecosystem in, this table are live streaming. And as a platform operator, we don't intend to so-called balance. The traffic. Actually we never do anything to balance the traffic or rebalance.
I think we should keep the market open to the customers. It's their option to select, which one to follow, and, which ones they in favor of. And but for us, we, we always try to help and incubate more and more diversify KO else and diversify. And I mean, young stars in the cellars.
To become a new generation Stars.
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That's two NS question for the new defective, pipl. Actually. We did very necessary preparation for the blow, which took effect is on the, on November the 1st and based on our preliminary assessment. We don't see, we don't expect PL. Pipl will have a material impact on our business. But because this is still a very short timeframe we still need
More time to assess.
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Werder next question.
Hi, thank you management for the opportunity to ask questions. First one is on some of the kind of New Growth business that you highlighted at the press release, including both the international business and also the cloud computing business. How should we look at the growth in the future? What kind of competitiveness are we seeing in overseas market? And particularly on cloud is the kind of a twin from a major customer laws already behind?
Therefore we should continue to see acceleration growth going forward. My second question is related to Strategic investment. How should we look at the level of investment going into fiscal 2023? Given we have already reached achieve some, you know early success should we expect continued to step up investment in top of views and Marketplace? Coverage Community Marketplace are going into fiscal 2023. Thank you.
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Thank you for the first question today. As we said, we are taking the multi-engine grows up approach to to grow our business. So today we you see that both cloud and international business. Show a very robust growth, the revenue, the cloud, this quarter resume their, it's gross to a 33% young year and the for International Business for international wholesale and retail business as a
Reach.
34%. So I think for both business today, both of them are in England in early stage of development, early stage of growth. We still try to try to build a to do the right thing to build the right infrastructure to to make sure we capture the long-term opportunities and to maintain a sustainable growth example, like for cloud today, we enhance our English.
Last moment in Technologies and products. And in our, as I just shared in my, in my script, we announced a couple of very important technology and product grading seeing our upper strata conference. This September. And this is a reflection of our continuous efforts in in in Cloud relevant Technologies and products. And we
Going forward, we will continue to do so and we believe that for cloud opportunities in China in the world. It's not only a replacement of the I existing it infrastructure but instead, actually, because of cloud, you get new opportunities in in intelligence Services. You have got new opportunities, in 5, G's for, not only for cloud but also for network and terminal and
Each. So we will get ourselves ready for all these new opportunities. And and I think this is relevant to all the gold industry, all the sectors and in economy and not only in China, but also you many other markets in the world and as to the international business today, we reported that our AC for international market reached 285 million. I think we will.
Corrupted growth. And if you look at the penetration of e-commerce in many other markets outside China, I think still in a very early stage. We strongly believe that the with our Perpetual technology and experience is in this sector. We are in a good position to capture this opportunity in many other markets, but as we always said, we focus on grows, but we focus on quality as well. So we focused on a
A sustainable growth in in capturing this new opportunities, but long-term wise, we are very confident about this multi-engine growth strategy. Thank you.
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Right on the weather, we will continue to invest and to what level are investment would be in the future. I think, first of all, we for sure we'll continue to do that. Well, Martin monitoring the business progress in this strategic initiative areas, so when you look at where we invest, nowadays is used
Through our top audio Tessa is cetera and also the services provide more services to our user base and local service segment. We are still quite a lot of potential there and also globalization Lazada and and try and do a cetera these areas. I think it's not a one-year investment kind of a period. It's a several years.
Ears and but there might be some adjustment in terms of the mix of the investment. For example, we expect to achieve a billion new Active consumer in the following two quarters. And then once I time, we achieve that we can focus more on the engagement and those Mate app user grows. So the you asked about 23,
Actually, that's not all look. I think we we will start our business planning and budgeting session soon. So that will provide more color inside and later on.
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Team chat, who don't know.
John Wong who at the moment teenage on which she don't want me. The great way to use on the Intruder going to our daughter. Hi, this is Rob. I just want to make two comments are is called today. First. I just want to make a slight, you know, it gets error change.
You know script, we said w11, gmv was 54 point 0 3 billion was actually 540 point three billion. That's the first notes. The second. We are having our investor day on December 16 and 17. We look forward to hosting you. I'm sure there are a lot of questions. You may still have and we look forward to address all the questions on the two-day event.
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Thank you, and this is the end of our talk today, will pass back to the operator. Thank you.