Q1 2023 Alibaba Group Holding Ltd Earnings Call

Good day, ladies and gentlemen, thank you for standing by welcome to Alibaba Group's June quarter at 2022 results conference call. At this time all participants are on listen only mode. After management's prepared remarks, there will be a Q&A session I would now like to turn the call over to Rob Lin head of Investor Relations.

The Alibaba group. Please go ahead.

Good day, everyone and welcome to Alibaba Goose June quarter, 2022 results conference call.

With us are Daniel Zhang Chairman and CEO .

Joe Tsai Executive Vice Chairman.

She chiefly chief financial Officer.

This call is also being webcast if on a section of the corporate website, a replay of the call will be available on our website later today.

Now, let me quickly cover the safe Harbor.

This discussion may contain forward looking statements forward looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from current expectations for detailed discussion of the risks and uncertainties. Please refer to our latest annual report on form 20-F, and other documents filed with the U S. S E C.

Now on the website of the Hong Kong stock exchange any forward looking statements that we make on this call are based on assumptions as of today and we do not take undertake any obligations to update these statements except as required under applicable law.

Please note that certain financial measures that we use on this call such as adjusted EBITDA adjusted EBITDA margin adjusted EBITA adjusted margin non-GAAP net income non-GAAP diluted earnings per share or a D. S and free cash flow are expressed on a non-GAAP basis, our GAAP results and reconciliations of GAAP to non-GAAP measures.

Can be found on our earnings press release.

Unless otherwise stated growth rate of all of the metrics stated.

During this call.

It refers to year over year growth versus same quarter last year.

In addition, during today's call management will give their prepared remarks English at third party translator will provide some opinions Chinese translation another conference like <unk>.

Refer to our press release for details during the Q&A.

<unk> session you will take we will take questions in both English and Chinese and the third party translator will provide consecutive translation all translation.

Translations are for convenience purpose only in the case of any discrepancy managements statements in the origin language Whoopi Bell with that I will now turn to call to Daniel.

That's wrong.

Hello, everyone. Thank you for joining our earnings call today.

We have delivered stable results after overcoming challenges in an extraordinary quarter.

According to data released by the National Bureau of Statistics.

China's GDP grew by 0.4% in the last quarter.

Since the outbreak of the pandemic.

Retail sales decreased year over year in April and May due to this resurgence of COVID-19 in Shanghai and other major cities.

And it has slowly recovered in June .

Despite the soft economic conditions.

We managed to deliver stable revenues and then narrowed losses in our several strategic businesses by improving operating efficiency.

In response to these external macro uncertainties.

Our guiding principles have been as I wrote in my annual letter to shareholders.

B coffee then.

Be flexible and be ourselves.

We are confident about the future of the digital economy.

We are confident that digitization as a universal trend across the industry and the market.

And this will constitute an increasing percentage of the total economy.

Be flexible means actively adapting.

To the extent no challenge and are finding our own path through the social and economic development cycles.

B ourselves means focusing on our three core strategies.

Namely consumption cloud.

Cloud and globalization and delivering high quality growth with E. S. G. As a foundation for reaching our vision of becoming a good company the lots 102 years.

Yeah.

More specific like we.

We are executing our three core strategies and delivering high quality growth in the highly uncertain environment to date in the following ways.

On consumption.

Leveraging our strengths, which is our digital commerce infrastructure built on comprehensive fulfillment capabilities to serve diverse consumer segments.

And a focus on consumption categories with a higher certainty of demand.

We already achieved the target of one bidding annual active consumers in China during the last fiscal year.

Going forward, we will focus on growing our wallet share in different consumer segments.

Instead of pursuing further absolute increase in our user base in China.

On cloud.

We will focus on enhancing our competitive advantage, which is our proprietary technologies.

And is serving the sectors and the customers that represent the future in social and industrial development.

On globalization.

We will focus on the markets with favorable economic development prospects in the next five to 10 years.

Investing in localized the capabilities and the building infrastructure you can logistics in the cloud.

During the past quarter.

Hold on T. G N V experiments.

Mid single digit percentage decline on a year over year basis.

We saw signs of recovery since June .

It just takes and the supply chain situation gradually improved after COVID-19.

Restrictions ease.

Over the past few months.

Daily active users and consumption related page views of our cobalt up.

Remained relatively stable despite the market volatility.

Consumers with the highest spending power demonstrated strong loyalty to our platforms.

In the 12 months ended June 32022.

More than 123 million annual active consumers each spent over 10000 RMB uncalled on Tmall.

Representing a retention rate of approximately 98% compared to the prior 12 month period.

Which was on par with the data as of the end of March.

H E B I VIP.

Members, our most important premium users.

To grow at a healthy rate to $25 million by quarter end.

With average.

With annual average spending of over 57000 RMB per month per member.

Starting in July we are seeing gradual recovery of business performance compared to June .

Especially in the relatively more impacted category in the past few months, such as fashion and electronics.

As we continue to grow our location based digital commerce.

Infrastructure in recent years.

Oh lets see if I the business models are showing complementary benefits.

For example.

While certain discretionary categories Powerball T Mo was negatively impacted by the pandemic.

Our festival and all of them are business captures Cup.

Capture growth opportunities in food and groceries.

Fulfilling family needs, but they didn't necessities.

In the past quarter Fisher post gem equal over 30% year over year, and Oh that must G. N V of non restaurant deliveries increased by over 50% year over year.

We are aware that the older real close off pulp on Tmall JD, what's below China's retail sales growth in the past quarter.

As we experienced increasing fierce competition among various formats of e-commerce.

From Alibaba perspective.

I want to be clear about our competitive strategy.

On the consumer side, we will continue to strengthen COBOL apps unless he learned my thought my Shea as the main shopping destination.

With diversified experience of digital commerce formats.

Even in a highly uncertain market environment.

We will focus on serving the consumer groups with a higher spending power, while providing a matrix of consumer offerings with diversified value proposition for different user segments.

Such as how 'bout deals how tight tight Idaho fish.

Free shipping is Fisher.

On the merchant side, we will continue to enhance our tools and services to strengthen our market position as the main platform for sustainable business operations.

In addition, we will also take advantage of a quality of operations in China Commerce.

Our current scale is much bigger than our peers.

And more importantly, our advantage in profitability is even larger.

Therefore, we will make the best use of our capital reserves by increasing in building consumer mindshare.

User experience and the Qualcomm capability in key areas, such as logistics and officer after sale services.

And execute on these as our long term strategy.

Yeah.

During the Covid resurgence in major cities, such as Shanghai, and Beijing in April and May.

The Digitalized networks integrating interested he congress and fulfillment has become a new infrastructure in more than urban life.

During the quarter.

Oh that must restaurant delivery volume was negatively impacted by Covid restrictions.

However, all of Us G N V. During the quarter was less impacted as order volume for non restaurant delivery, such as food grocery and a modest increase is a rapidly.

Which also contribute at much higher basket size than restaurant deliveries.

As Covid impact Easton.

But I must operation has been recovering and it's G. N V received positive growth year over year in June .

At the same time, while free shampoo and Sun art experienced negative impacts in offline sales during the pandemic this quarter.

They play an important role in providing essential supply support for local communities.

Leveraging the digital sales.

Intra city fulfillment capabilities.

The percentage of online sales.

Fishing pole and the sudden are during the quarter reached 68% and 36% respectively.

Oh that must be unit economics turned positive this quarter.

Mainly due to increased average order value as well as its ongoing focus.

<unk> user acquisition spending and reducing delivery cost per order.

Looking forward, we will continue to focus on its city strategies and strengthen its customer mindset from a restaurant delivery to everything delivery.

While improving its operating efficiency.

We are confident about no real autonomous operating losses during the fiscal year.

Hey, Matt.

Other important business in our local consumer service segment.

Continue to grow towards a destination around service discover and the transaction platform.

In June the number of.

Average daily active users of a map.

Reached a new high of over 117 million.

Driven.

By Easter Covid impacts and ongoing.

Each months of local content and services on the platform.

Our international Commerce retail business in Southeast Asia, and Europe experienced a decline due.

Due to change in European Union's V. A T Rus.

Depreciation of local currencies.

Russia, Ukraine conflict.

And normalizing offline activities off the Kobe restriction lifted.

In the regions.

In spite of these challenges, we still see great opportunities in the international market under the general trend of Digitization.

Today, we have already established certain.

Foothold in the international market.

On a combined basis, our international Commerce retail business has an annualized the G. N V of over 50 billion U S dollar.

Going forward, we will continue to focus on growing both the cross border model and the local commerce model.

And our building logistics as a core capability.

Despite the near term sales fluctuations.

We will continue to focus on building the cross border logistic network from China to Europe , and the local logistic network in South East Asia.

We believe the establishment of these infrastructure will bring long term value.

Our cloud revenue delivered 10% growth year over year during the quarter.

The slowdown in revenue growth was the result of multiple factors.

Including slowing macroeconomic activities.

Declining in revenue from the top internet customer.

Softening.

Demand from China, Internet customers and the delay in parts of our hybrid cloud projects due to the impact of the Covid with cigarettes.

Looking forward, our list of uncertainties economic outlook and the internet industry deceleration.

Our coal business will continue to focus on the following areas.

Number one building.

Building perpetually technology capabilities in key areas, such as computing big data and artificial intelligence.

Number two.

During the growth opportunity in industrial Internet.

By identifying the right industries and the customers.

And number three strengthening our cloud data security capabilities and are defending our bottom line.

We have been seeing some progress in these strategies.

Contribution of cloud revenue from non Internet industries.

Was 53% in this quarter.

Up more than five percentage points compared to the same quarter last year.

During the same period more and more enterprise customers are adopting deepak to work or study as COVID-19 restrictions increased across the country.

He can talk will continue to strengthen its position as the digital work place collaboration platform by further improving the capabilities and the increasing use of penetration of its core office products, such as document collaboration and the virtual conferencing.

In addition didn't talk will enhance its low code application development platform to encourage the development and the usage of more diversified the digital business applications on theme parks.

As part of our E S C ESG strategy.

We are committed to corporate governance excellence and diversify it at the board level.

And the diversity at the board level.

Earlier today, we announced two new independent directors appointments.

MS Irene Lee and Mr Albert and Bose.

Respected business leaders with invaluable global insights as well as China experience.

I believe their participation will add great value to our board.

In addition, Mister.

Mr Don't you know what one of our independent directors will not seek reelection.

Election. After his current term expiring in September .

I would like to express our most sincere gratitude to Mr tone.

For his invaluable contribution to Alibaba over the years.

Yeah.

Finally, I would like to talk about our thoughts on the path forward in the current macro environment.

The external uncertainties, including but not limited to international geopolitical dynamics.

Colby Refrigerants, and then China's macroeconomic policies and the social trends.

Off beyond what we as a company can't influence.

The only things we can do at this moment is to focus on improving ourselves.

For example, as I mentioned early we have made meaningful progress during the quarter in narrowing operating losses for several business units.

How 'bout deal Palletize high free ship hold.

Lazard and Youku.

Through operating efficiency enhancement and cost optimization.

We are still in the process of improving the quality of operations across the organization.

We are confident this is a result that we can deliver with certainty through our own efforts in a highly uncertain environment.

Despite the challenges we are facing.

Although our overall financial position remains healthy with strong free cash flow and net cash reserves.

Which is our biggest advantage.

You'll be uncertain times, we believe the best investment is to invest in ourselves.

To build our core capabilities and through continuous self improvement.

We will continue to focus on serving our high quality customers.

Building high quality infrastructure for digital Commerce and are driving high quality technology innovations.

We believe these will lay the foundation for our healthy and sustainable with your vitamin over the long term.

Thanks, everyone for your time.

I now will turn the back over to Toby who will walk you through the details of our financial statements.

Thank you Daniel.

Let me start with financial highlights for the quarter.

This quarter, our total revenue was RMB 206 billion.

Table year over year.

China Commerce, secondly, revenue slightly declined by 1% year over year to RMB 142 billion, while cloud second line revenue grew by 10% year over year to RMB 18 billion.

Income from operations for the quarter was RMB 24, 9 billion, a decrease of 19% year over year.

Primarily due to decreases in adjusted EBIDTA.

Adjusted EBIDTA.

<unk> by RMB, seven 3 billion to RMB $34 4 billion.

The decrease was primarily due to RMB seven 2 billion decrease in China Commerce segment, EBITA, partly offset by loss reduction of RMB, one 7 billion or 36% in local consumer service segment.

Now, let's look at cost trends for the quarter, excluding SBC as a percentage of revenue.

Cost of revenue.

Ratio increased to 62% in June quarter, probably.

Primarily due to firstly higher proportion of our direct sales business, such as fresh Apple and Tmall supermarket as well as growth in Alibaba House direct sales businesses that resulted in increased cost of inventory as a percentage of.

Revenue.

And secondly.

Growth of tiny businesses, which led to an increase in logistics costs as a percentage of revenue, which is partly offset by the reduction in delivery cost per order of element.

Product development expenses ratio remains stable at 5% in June quarter compared to the same quarter last year.

Sales and marketing expenses ratio decreased to 12% in June quarter, reflecting our efforts in optimizing user acquisition and retention spending across businesses.

General and administrative expenses ratio increased slightly to 4% in June quarter.

non-GAAP net income was RMB 33 billion, a decline of $13 2 billion year over year.

Mainly due to decrease in adjusted EBITA and share of results of equity method Investees.

GAAP net income was RMB 23 billion a decline of $22 5 billion year over year, mainly due to decline in non-GAAP net income and decrease in net gangs arising from change in market prices of our equity.

Then in publicly traded companies.

Cash flow and balance sheet.

As of June 30, 2022 we continue to maintain a strong net cash position of RMB 340 billion or U S. Dollar 51 billion.

Our strong net cash position is supported by robust cash flow generation.

In June quarter, 2022 net cash from operation and free cash flow were RMB 34 billion and RMB 22 billion respectively.

Majority of the difference is operating Capex spending at RMB 11 billion, reflecting our investment in cloud businesses and logistics fulfillment infrastructure.

During the quarter, we repurchased approximately $38 6 million of our a D. S is for approximately U S. Dollar three 5 billion under our share repurchase program.

Yeah.

Now, let's look at our segment results.

Revenue from our China Commerce Seckman in June quarter was RMB 142 billion, a decrease of 1% year over year.

Custom manual revenue decreased by 10% year over year to RMB 72 billion.

How 'bout and Tmall physical goods paid G N V decreased by mid single digits.

CMI growth lacked GMB growth this quarter, mainly due to higher order cancellations.

It's out of logistics bottleneck from COVID-19, resurgence and restrictions that resulted in supply chain and logistics disruption in April and most of May.

In later Mi.

That just takes capacity normalized we saw recovering G. N V driven by our successful June 18th shopping festival that was strongly supported by merchants and all your consumers.

If we further break down custom manual revenue growth into advertising and a commission revenue Commission.

Commission revenue recorded mid teens decline due to higher order cancellations co.

Total advertising revenue declined slightly fast and that of page N V to cry.

Direct sales and others revenue grew 8% to RMB 65 billion.

Primarily driven by strong growth of online purchases of food grocery and F. M. C. G goods that benefited our friendship whole tmall supermarket and said not.

Partly offset by softening offline sales due to COVID-19 impacts.

The percentage of online sales of fresh Apple and sudden now reached 68% and 36% respectively during the quarter.

By leveraging our multiple direct sales businesses and on demand delivery infrastructure. We believe we're well positioned to better serve consumers' increasing demand for on demand delivery of food.

Lottery and daily necessities in the future.

China Commerce settlement adjusted EBIDTA decreased by RMB, seven 2 billion to RMB $43 6 billion in the quarter.

Which is mainly due to RMB 8 billion decline in CMI revenue.

We are making progress to improve efficiency of lossmaking businesses. They.

The combined losses for Tau about deals and fresh air pole, Nino, but narrowed by RMB, one 5 billion year over year.

How does that tie losses increased moderately year over year, and still delivered a robust GMB growth of more than 200% year over year.

Its losses reduced significantly quarter over quarter, driven by optimized the pricing strategy that is sourcing capability and lowered operating costs.

Our international Commerce, Secondly, revenue in Jupiter, Florida was RMB 15, 5 billion, an increase of 2% year over year.

Revenue from International Commerce retail business declined by 3% to RMB 10, 5 billion, reflecting declining revenue off at express and triennial.

Offset by positive revenue growth of Lazard.

Revenue from our Alibaba Dot com wholesale business grew 12% on the full point 9 billion. The increase was primarily due to healthy 16% growth in value of transactions completed on Alibaba Dot com that led to an increase in revenue.

Generated by cross border related value added services.

[noise] Lossada delivered healthy positive revenue growth as a result of D. N equals an active increase in a more monetization initiatives that resulted in a higher monetization rate.

Chengdu revenue slightly declined due to ongoing depreciation of lira, despite robust order growth of 46% year over year.

Odd express experience that declining orders due to change in the use of V. A T. Rus keeps Jason of Euro against U S dollar as well as ongoing supply chain and logistics disruptions due to the Russia, Ukraine conflict.

International Commerce segment, adjusted EBIDTA loss widen by RMB 537 million to RMB, one 6 billion in June quarter.

This was primarily due to increased investment in triennial as they invest and expand into local consumer services and international B to C businesses.

Partly offset by reduced losses of Nevada, as a result of revenue growth and enhanced operating efficiency.

Revenue from local consumer services segment grew 5% to RMB 10, 6 billion, primarily due to more efficient use of subsidies that were contra revenue of element.

Local consumer services adjusted EBIDTA loss reduced by RMB, one 7 billion year over year to RMB 3 billion.

I'm really due to narrow the losses of our two home visits.

M. A C unit economics per order tend to positive for the quarter driven by increased average order value year over year as well as its ongoing focus on optimizing user acquisition spending and reducing delivery cost per order.

Revenue from Tainio after into secondly, elimination was RMB 12, 1 billion in June quarter, an increase of 5% year over year.

Primarily contributed by increase in revenue from consumer logistics service as a result of service upgrade to enhance consumer experience, partly offset by the decrease in international orders for Ali Press Express.

In June quarter, 70% of China's total revenue was generated from external customers.

[noise] Tainio adjusted EBITA losses, well on the 185 million up by RMB $39 million.

The increase was primarily due to our investment in expanding the global smart logistics infrastructure as well as reduce the profit of Ali Express fulfillment.

We will continue our efforts in building comprehensive logistic and fulfillment infrastructure in China and internationally.

The foundation for sustainable long term growth for our digital commerce businesses.

Revenue from our cloud Seckman off into settlement elimination was RMB 18 billion in June quarter, an increase of 10% year over year.

Year over year revenue growth of our cloud secondly, reflected recovery and growth of overall not internet industries, driven by financial services.

Public services and telecommunication industries.

Nearly offset by decline in revenue from the top internet customer and online education customer as well as softening demand from other customers in the China's internet industry.

For the quarter ended June 30, 2022.

Contribution of towel revenue off the intersegment elimination from the Internet industries was 53% up by more than five percentage points compared to the same quarter last year.

Adjusted EBITA of how segment, which comprised of Alibaba cow and deemed Huck was a profit of RMB $247 million in June quarter decreased by RMB $93 million year over year.

This is primarily due to our investments in technology and increase in co location and bandwidth cost as a result of increase the usage of <unk> products and services from enterprises schools and organizations due to grade to hybrid work adoption driven.

By COVID-19 resurgence since March 2022 in China.

Revenue from our digital media and Entertainment segment in June quarter was RMB, seven 2 billion, a decrease of 10% year over year.

Primarily due to decrease in revenues from Alibaba Pictures, Youll cool and other entertainment businesses.

Adjusted EBIDTA was a loss of RMB $630 million up by 211 million year over year.

Youll cool continued to narrow losses year over year, but was offset by increase of losses of other entertainment businesses due to COVID-19 impact.

Let me wrap up with some final thoughts last quarter, we've shared with you some of our key operating principles and financial objectives that in crude.

Folks on high quality growth.

Improve operating efficiency and optimize cost structure and maintain strong cash flow and that cash position.

During the quarter, we have made progress in executing these objectives, we saw losses narrowed the year over year for a number of our businesses.

We generate to the U S. Dollar 3.3 billion in free cash flow and currently has a Val U S. Dollar 50.8 billion in net cash position, which gives us the financial flexibility to grow the business and improve returns for shareholders.

Even though we have seen in gradual the amount of recovery for China consumption businesses in amongst of July . We believe there are still a lot of risks and uncertainties from slowing Mark Marco activities.

Facing these challenges we will focus on delivering high quality growth of our three core strategies in this highly uncertain environment as Daniel mentioned previously additions.

Additionally, we will continue to focus on improving operating efficiency optimizing costs and invest in building long term capabilities for all major businesses.

Thank you now, let's turn to Q&A.

Hi, everyone for todays call you are welcome to ask questions in Chinese or English.

Party translator will provide consecutive interpretation.

Oh for the Q&A session.

And our management will address your question. The language you ask pretty soon that the translation is for convenience purpose only.

Case of any discrepancy or management statement into origin that language will prevail.

If you are unable to hear the Chinese translation bilingual transcripts of this call will be available Arnaud upset with them one week after the meeting.

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Operator, please connect speaker and S. A conference line now please start the Q&A session. We're ready thank you.

Thank you ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced.

If you wish to cancel your request please press star two.

She gets more people the opportunity to ask questions. Please keep yourself to no more than one question at a time.

Your first question comes from Ronald Keung from Goldman Sachs. Please go ahead.

Thank you L. A San Juan you don't Wanna Nah, Daniel It's Toby Rob's, he's here and even a finish out now that you guys have called out take a little yeah, you'll ECA is showing signs of recovery three times, he's element, whereas with G. M. D C I'm not using that shouldn't continental and finish out you sound like you're just you conduct yourself wasteful.

Shopping and they go Wow, you may 17th Alamo plenty of tons of money.

Shellfish at all Joan Tong Sidoti I O J.

On vehicles.

Opinion.

[laughter] elements.

Yeah.

[noise] Ah Thank you Daniel and Toby for your earlier presentations a note that you spoke to signs of recovery that you've seen.

From June onwards, so I'm wondering if you could tell us more about the signs of recovery you're seeing in terms of G. M V. A.

And see them or what the outlook looks like for the coming half year, and how you see consumption recovering and developing in the medium to long term.

Oh, it up without a shot just to take a so 18 months ago the shelf either to the Chooser took a what would you do a husband Soc elements when a woman that penalize on condo.

They got to go so we have a whole lot from hopefully you'll clean food. So you shouldn't take gunia the way food Tobey is what do you want in order to somehow take a TCR T trial. So certainly you can query for the <unk> not to go and we had $10 from shelf Elijah vocal a twinkle in do we all bought when they conduct milkwood alone.

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She knows about tripling your home or condos or choose to take tissue.

If you dig a.

It'll be all she had continue to have them do it and how quickly things yet.

Yeah.

Thank you well as regards the recovery that we're seeing in our consumption trends certainly on our platforms. We saw that following the period of April may going into June are signs of recovery certainly appeared in particular with the recovery of delivery and logistics capabilities the normalization of logistics.

And certainly in this year's 618 shopping festival, we saw very good performance with a positive growth achieved for the quarter and we continue to see this positive trend of recovery continuing through.

Through July and we expect that July will be even better than June .

Uh Huh that's of course normally a condo just has he I'll take a swing at chico's shelf, either shingly hooks shelves. So that your Chile kind of I'd say that it's good it's a contaminant in the way that it's always with me at Kendall actually has gone quite a huge huge water. They go and what kind of desserts and good to see the GDP that sundar bulk hauling.

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Each in shop bulk or let's say a search engine. So should there you're going to see the shelf. So that you can shop, which I'll tell you. So you've got some time. There you go you can find them. So you will need to say to a twinkle in cyclical it's enormously a condo.

Jin Guan shelf, sorry to take up a wooden pool, what would you end up with a damsel doesn't seem the shelf with a young well, let's take a community here you go here for the quarter.

[noise] Ah another important piece in this recovery relates to consumer psychology, and consumers' expectations are for the future. We can look at the publicly available data of course, we look at a GDP figures.

<unk> figures on a nationwide retail sales, but one one data point that we pay a lot of attention to is consumer spending as a proportion of disposable income are the figures from the National Bureau of statistics.

Shows that that figure consumer spending as a percentage of disposable income in the first half of the year.

<unk> was 64% as compared against 69% in the previous year in 2021, so that that proportion has been down in the first half of the year and even more so in our urban areas than in rural areas.

And I think that's an entirely normal reaction on behalf of consumers in terms of consumer sentiment in the context of the pandemic. So certainly although we are seeing.

Signs of steady recovery in consumption I think it will take more time for that to fully play out and for consumer confidence and sentiment to fully recover.

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Okay.

In terms of our merchants are certainly what we've seen on our China retail marketplaces is overall, a strong positive sentiment from merchants to take full advantage of our our marketplaces and the digital tools available there to drive their business growth.

There is strong enthusiasm on the part of merchants to drive their sales are all merchants have their own challenges are especially during this period and merchants continue to want to take advantage of what we have to offer to overcome challenges and drive their sales.

Uh huh.

Thank you.

The next question.

Yeah.

Thank you. Your next question comes from Thomas Chong from Jefferies. Please go ahead.

Well I'll say, sometimes they have one eight times, it's all about the T O N E.

Sure.

But if demand comes out well.

You'd be eight China Congress.

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The EBIT improvement.

So when you sign a woman and guide to look kind level instead of eight so I kind of I O N E.

Eli its highest quarter Oh, so should we like to do that.

Cost controls that you've got.

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She's also somewhere in your supplement I rely one piece that's unknown.

It's not one.

Hi, Oh, well when you look on the.

Our margin profile.

Thanks management for taking my question.

I have two questions. The first question is about a we have seen ebay improvement is much better than market expectations.

Wonder how should we think about China as well as overall ebay Inc.

Our blended interest expensing it.

So the trend.

We can see inflection point plus of course, he has globe in coming quarters and a little phone. We also though to say that the one P. M. Eastern edge is also doing very well as well.

Wanted to ask.

About the strategy.

As well as the.

But the no contribution margin profile in the long run thank you.

Yeah.

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<unk> not stated a key to the manpack actually can I can't I'll, let Sean take some good that's haven't been Youll find counsel when the high should the therapy to hobby He got vehicle.

Thank you I will take the first part of the question relating to our cost control as you'll recall during last quarter's earning call. We indicated that we would be prioritizing our cost structure optimization and cost control are on this front, we've implemented a whole.

Full range of different strategies across our different businesses and I think certainly what you're seeing this quarter is that this overall cost control strategy has been paying off with good results.

Not saying here's shall I take I take the tickets haven't got time in case that the ketonemia well much empty the challenge of temp and Jacob you want that punch. It if you've got phone line quite usage fishing. So E that way like I said, the kids and cause you to remain one of the highest grade key huge fishing home literally cute John said some good that you won't find one that hadn't been T.

Call shortly.

Yeah, So what sounds like a totally that's phishing hijacked I'm glad you know you didnt solution to them, we can bring the cheesecake losses. This year 10 button that tissue that will add that you've got you're doing it.

In the coming quarters in the remainder of this fiscal year, we will continue to pursue the strategy of cost optimization.

Cost control will continue to implement the policies that we have to find to optimize our cost structure further drive efficiencies and of course, the key to all of this really is execution. We will continue to execute on these policies for the coming few quarters.

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As Daniel mentioned and as I also mentioned in my script, we're in a financial position that allows us to have a considerable flexibility in terms of our approach and therefore, we will be seeking a balance between cost optimization and control on the one hand.

While also continuing to make important investments investing in technology and investing in other core areas to build our capacities to better position ourselves for sustainable and long term growth.

Keep alcohol chicken when you take out something good that when the EBITA margin the win T. T cell count woman Satchel Church, and good Charlotte Houston contend that youll kind of quotes in downtown concerned, let's see you don't find that vehicle, we find some of them that you'd be kind of marching shall not wait let me a challenging J Goldman change a culture that you've got some chatter about.

So now that you've got those Harley Davidson teach them I should say punctual women's had taken only EBITDA margins down Oh, you got down to you got to teach them.

The other part of your question had to do with our EBITA margin and certainly as we continue to optimize our cost structure and drive further efficiencies are the improvements will be reflected in our EBITA margin and.

And we expect that as we further pursue high quality growth and high efficiency growth will continue to achieve that kind of improvement in our EBITDA margin.

Hi, Thiago and T Chek Daniel.

How does it go it was John Taylor, who needs a change they go to Gen. One pizza chain I'd say it was the only thing I'd say, that's great and then Youll Qualcomm margin as a channel to wasn't young child allergy shots, the Adelaide Young woman.

The familiar you'll watch what they perceive as high wishes you all that you can control a classical women's and good suddenly shut ins to lunching the punt on a tier two it well it sounded it uses a call to your questions.

Thank you this is Daniel but before I take the other part of the question about the one P model I'd like to add a few more comments on that previous piece to do with cost structure optimization and efficiency.

And what I'd like to highlight is that for Alibaba are pursuing cost optimization and driving efficiency is not a decision that is primarily driven by our financial considerations, rather it's very much informed.

By our strategic choice and our judgment of the overall macro environment, we find ourselves in.

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As I said in my prepared remarks, both last quarter and this quarter. It is alibaba is consistent strategy to pursue high quality development.

Development that means focusing on serving high quality users.

It means investing in high quality technology innovation, and providing high quality digital infrastructure for commerce on all of this allows us to support business development and achieve sustainable and healthy financial results and we will very much continue to do so.

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Going into this new fiscal year are now in the first quarter.

On the consumer side are you know I'm looking at the changes in the macro environment overall and given that we have already achieved the important milestone of having 1 billion. A six are our future strategy going forward will shift from a focus on new user acquisition.

Because we already have within that 1 billion AAC user base essentially all of the active consumers in China. So instead going forward will focus on building our relationship deepening our relationship with our existing user base better segmenting, our that user base and ensuring that we have compelling <unk> propositions for all tiers.

And cohorts within that user base to continually grow our share of wallet with our existing consumers that we have and all of this will we believe be conducive to serving a higher efficiency and improving margins.

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Yeah.

To elaborate further on our consumer segmentation strategy, because Thomas noted the improvement that we've made and the performance of core Commerce segment.

And I think a lot of that has to do with the investments that we've made over the over the past two years.

To build a differentiated matrix of offerings for these different consumers within our user base, providing differentiated demand are two different cohorts of consumers.

Through this matrix.

So the investments that we've made over the past couple of years in that matrix are very much. So.

Starting to pay off and have put us in a very solid position to continue to grow our share of wallet with all of those consumers and of course as as a result to further improve our financial performance figures.

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Yeah.

And this of course is also highly relevant to your other question about the one P model for Alibaba when it comes to the one P model in the three P model. It really comes down to whichever model is best able to satisfy the demands of our consumers. That's what we want to give the consumers actually want me yeah. So sorry to tidbits you can.

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Ciao shelf that well Monsieur lunch, England, the woman Pingo <unk>.

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Yeah.

However, in a developing our <unk> strategy, we have very much redefined what <unk> is all about and how it works because we don't want to become a traditional E tailers.

At erect a wall between brands on the one hand and consumers on the other very much to the contrary within our one P model.

We're buying from the brands and selling to consumers, but we're giving brands visibility and giving them the ability to engage with their consumers to achieve insight into what's happening with their consumers and also of course to drive further efficiency around their supply chains and their logistics.

Doctor.

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And certainly we will not take advantage of the the one P model to engage.

Engage in a price competition.

Okay.

Next question please.

Thank you. The next question comes from Alex Yao from J P. Morgan. Please go ahead.

Sure Glenn it's unclear, what's going to play out.

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Yeah.

Thank you I have some follow up questions regarding the efforts the group is making to optimize costs and drive efficiencies.

In particular regarding the underlying commercial logic, you talked about as a matter of our group strategy better segmenting consumers and driving growth of wallet share, but are you seeing the pace of digitalization playing out more slowly in some segments than others.

And you.

How how are these are efficiency and cost optimization strategy is playing out in the different segments.

Segments are also in relation to the early stage businesses I'm talking about the newer businesses that are still lossmaking, how are you balancing the.

The need to control costs and drive efficiency on the one hand against the need for a long term investment and growth.

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Yeah.

Thank you.

Well.

In terms of our strategy.

Sure.

Something very important we've been doing is building a complete consumer matrix with Togo is our flagship.

Turbo deals are to serve our consumers who are more price sensitive.

And making forays into consumer group buying which has become very hot I was called <unk>. We also have a fresher Po and idle fish are all of these pieces.

With their respective you know very clear value propositions and target our use cases and consumer groups.

And what's extremely important for us is that we have a consumer mindshare. This is the underlying commercial logic.

And this is in fact, the most valuable asset that Alibaba has as a company is that a consumer mindshare, we don't need to be paying money to induce the consumers to come back we have the mindshare of the consumers and that's what's capable of driving a lot of organic traffic.

We get consumers coming back even when their willingness to consume may have weakened during.

During the pandemic period coming to us.

And as I shared with you you know our Dia you figures on page views have remained relatively stable.

Throughout that period.

So we have the 1 billion consumers within our AAC user base and a strong differentiated matrix of different apps and this positions us a.

To further.

Prove that mind share and capture the opportunities.

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But it's only on sometimes that goes how did he say equally more time assortments with Jean Michel you laid out you see all kinds of uncertainty and.

And each year like Hep C.

Some time ago. It seems to me either you couldn't hardly akitas Sergio well me isn't that Saturday Sunday itself, especially on something like teaching children. Since the truth is shut in so being sure that it's unclear what contextual she will assist you to U S. P&C GNC on pizza.

And I'm going to I would say that you do not tell you can't always hit you hit holidays you Jacob.

Okay.

So this is certainly relevant to what we can call the wide area network the entire nationwide e-commerce market, but it's particularly relevant also to what we can call the local area network or local commerce are.

Regional and intra city commerce.

Where we've been focused on a different cities and regions are with the businesses, including <unk>, <unk> and fresh pork and beef.

Because you need to achieve economy of scale in a particular city or particular region to drive down your unit costs.

In that particular locality so after several years of experience.

In this space, we've come to realize that it's not really significant to look at the entire nationwide market as a whole really you have to look at one city or one region in terms of whether you are achieving that economy of scale, there and take a city by city or region by region approach. So that's something I would like to share with all of you out.

On the line that's how you can develop a truly a three dimensional.

Respect it and in line without perspective.

We're deploying our strategy, where we select different cities and regions and prioritize resources.

To develop their on a city by city region by region basis to achieve those local economies of scale.

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Sure.

In the context of the current macroeconomic environment as I mentioned earlier our initiatives to.

Drive better cost efficiency are not driven from a financial perspective.

And in terms of our strategy, we will continue to make investments where investments are needed and justified we will continue to strengthen the parts of our matrix that need strengthening will continue to invest in building, our underlying capabilities and improving our relevant services in order to create long term value.

Okay next question.

Thank you. The next question comes from John Choi from <unk>. Please go ahead.

Thank you for taking my question a question on cloud I think Daniel you mentioned on your prepared remarks.

While the growth has slowed down in Q2, but as E C.

Economy picking up a bit on sensitive.

And just as you spoke about in July .

Like how should we think about the cloud revenue growth our momentum towards the second half of the year and on top of that you know I think Magnus mentioned you can see that.

SaaS elements like being a potential monetization opportunities.

Where are you right now with these initiatives and are you seeing the macro uncertainty companies kind of pushing back.

Hum.

Appointment or initiatives and if so how would that impact our strategy going forward.

Okay.

Hey, John Your first part of the question was broken them out can you just quickly summarize where you are.

Asking.

Oh, Okay. Oh My question was basically on the on the the cloud revenue growth opportunity in the second half at least.

I think I know you didn't mention on the why the QQ almost a little bit softer than usual so as we look into the.

Second half how should we think about the growth opportunities on the policies.

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Someone Daniel so I cant tell you, Josh I don't really teed up and so you do you know.

Some shoot peer out to California P. Right now most shutdown you're in some accounts.

Well, let me answer this question I think the I think we still need to look at the macro the lag.

Inscape I think if you look at the I T expenditure I mean as a percentage of total GDP I think China is far below our like the U S and other developed or something or other countries. So I think that's the biggest the landscape and.

The second biggest thing as I said at the Italy, Industrial Digitalization is a trend and all the companies are all the sectors across industries across sectors. Neither.

Digitalized.

I think that's the second a very important thing. So I think in this regard I think in general if you look at the picture of this is I think it's not a it's not a cyclical opportunity it's like a structural opportunity I mean for the for the long term and so that's why I think the in China and in the global <unk>.

Yeah, we are actually we position our cloud as our one of our core strategies.

Yeah.

Uh huh.

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Instead of kind of a window into our drink well I should say what he shoots on your home and don't wait by Eugene tissue thinking two elements you don't go who's seen the challenges.

What was the next part I want to make is that if we look at the market opportunities actually if you.

If we revisit the fast growth of the cloud business in the previous years I think that one of the very important driver was the internet companies. Because these companies are digitally savvy and they one they need to they have big data and they will make full usage of big data and they need a computing.

Power. So I think that this is also Oh, let me give a.

Our Alibaba cloud, a very huge opportunity too to transform a cloud computing from a technology to have real business and now we are very happy that we are in the leading position.

In this sector.

Well I think going forward, especially in China are all with the snow Dom.

Off the internet sector and the many people talk about the the Oh, what's the next generation. After this consumer intent internet actually the consensus is very steep.

Q4 is in industrial digitalization. So I think then now we are we are coming to the area of every company to come.

Internet company actually is not internet as a digital company. So I think that the so that's why internally we highlight are the.

The revenue contribution from Knight Internet companies, and we're happy to see that.

And your point is increased like is that as we disclosed this quarter, we improved like five five percentage point as compared to the same quarter last year. So I think going forward. We will we will try to capture the opportunity in vertical industries and of course bar I mean, our continuous investment in <unk>.

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Yeah.

No of course, when it comes to.

Company's willingness to spend on cloud and invest in cloud technology are.

You also need to look at the overall economic growth picture of the market as a whole are when the economy is doing well and companies are growing fast performing wells there'll be of course more willing to invest so there is of course, the macro impact there as well.

But this is also why in my script I emphasized a Y we're looking closely at our Sunrise industries because within in any economic context, there will always be some sectors in some companies that are on the rise that can outperform the economy as a whole and we want to prioritize service to them.

Yeah.

Thank you your next question.

Thank you. The next question comes from Yang from C. ICC. Please go ahead.

Uh huh.

Yeah.

Yeah I'll just use that question that you had no woman so Glenn Hello, everyone.

Glenn that you need.

Yes.

Thanks, you in July as well.

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Just on that.

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How did the outcomes.

You saw our agenda that's out solutions.

We're going through that and you'll see that especially where they'll go hot.

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Yeah.

[noise].

Thank you my question has to do with the changes that we've seen in user behavior over the past few years with a more and more user time being spent consuming short form video I'm wondering if you can talk about the impact that that's having and can be expected to have.

On E Commerce going forward do you do you expect to continue to see fast growth there where do you think that it's already a mature situation that we're seeing today.

And given this trend are.

In order to better serve our consumers and merchants, what strategic changes will alibaba proactively seek to make and what kinds of changes will alibaba not make.

Yeah.

Oh, well that's changed I'd say wounds healed tick up so then Sallie Bailey Canyon appointee shall I take the black slipping.

Its on time peanut allergy and foster.

Yeah, So I'll see you at a time yet.

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Well I'd like to begin by by clarifying. This this concept to avoid any confusion our short form video is a format. Our content format that can be used to convey information regarding our product, whereas E. Commerce is in it.

Industry and within the e-commerce industry. The use of short form video as one of multiple formats is nothing new at this point.

They go up with Tony your fishing, she can get into all the the pure wellness or just how about the pink has oh women's hold what you plan to something so you got to go.

The issue, we enchant those the only two P M, but instead I apologize if it's something you can tell what are you putting us on P&C on the types of people that built out.

In fact, I can disclose to you that on the Alibaba is mobile taobao app today more than one half of products.

<unk> are now being displayed to consumers via the short form video modality. So if five years ago. It would have all been images and text today, it's already more than half of that content is in video form.

So I just wish I knew they wouldn't he will tell you, though when he taught on the wound he puts it twice as pinker, Dan It sounds agenda wound team. So you look at their son's piano wouldn't T. Now, it's only the ones you'd say, it's only supposed to watch him agenda I'll eat some of the linear and shallow well maintaining that sleep all good at some time soon you won't put the mindshare Walnut Tayo shelf, you'll know women's Eddie.

So I I believe that your question really isn't about the relationship between short form video and E. Commerce, It's really about the relationship between entertainment.

And e-commerce.

And you know as I said earlier, the most valuable asset that Alibaba owns today that we've built up over the years is mind share users come to Alibaba with our consumption mindset.

So yeah, we saw a shelf that you'll see you know the Eagle Ford.

You bet they all equal.

So how should a utility but its own pinelake Joseph shelf as a ticket to the PMA I wasn't really developing late in so called top yeah. Since it goes so we go with the video you'll handle the I'll take the Knowhow Yoshi. So he will not use the challenge we saw sort of a PMA number say cyclical Alonso well me at Bethesda, She take a fishy cheat.

Tayo cousin machine that is let's say the.

So much so that's opinion shallow well no one of them I think that's what it's all just so we shall o'clock the home in the Cushing clock.

With all the time stamping I wish I knew.

You can call. It goes on the XI and the timing of its useful life mine. So we don't put a T. Yet I wish on June 10 times of intraday, Pacifically, but useful.

That's useful.

Pulling that young I didn't quite yoga and shelf is or the English shelter to yeah, Don you wake up the shelf as a sort of shelter you light up.

So it does look like you got.

So it's I would tell you obviously the change today, including way tussle. She has a fool you youll put us unless useful I'd.

So you've got a similar situation so most of the tender which on cigarettes to Cushing there you go.

Yeah.

No of course, it has often been said that shopping is fun, you know consumption as a kind of entertainment.

And.

To that extent Alibaba is a in the entertainment industry as well, but we're hyper focused on one subcategory of entertainment, namely shopping and consumption. It's a very specialized area that requires a lot of know how and that is very much our focus.

No.

Well of course going forward continue to learn about and adopt all kinds of new technologies as we've done over the years are going mobile introducing.

Customization personalization are adopting short form video.

And I'm certain that short form video is not the last technology that will come along and new technologies will continue to come off.

Tonight, the consumer experience both in the consumption context and in the entertainment context, but.

I think it's important to us to understand you know what is the entre and what is the dessert.

The next question.

Thank you. Your next question comes from Alicia Yapp from Citigroup. Please go ahead.

Yeah.

Hello, Thank you Juanita.

Oh, what X Y O y.

J O N E.

Sure.

Now when he had Danielle I'm sure sure Alibaba and Sinbad.

Okay.

So John I touch on Shish them on our Holdco should see a woman.

How does that tie up I know that you said.

How about yourself.

Ah you're not you seem to think.

Sure Let me I'll talk to you all seen Cheetah people she was telling us they see I actually my God I hope I'm answering them.

Excellent.

Thank you Mike.

Thank you my question goes to Daniel I'd like to ask please what at this stage is the biggest obstacle or challenge faced by Alibaba.

What is your talent strategy for talent retention and also what potential areas of investment as Alibaba interested in that you're not yet in but you might get into for example, a new energy. Thank you.

Yeah.

Oh wait I shall we shall take our.

So shouldn't you saw the order just the audio so you shouldn't either.

Calzaghe system I wish I own woman, Okay, Gotcha, where does the Audi hazards soda constitutes yet those are you glad it's so whether you got weak ones Sheeple Ali called she someone's opinion, so without gene cancer English to the call. So far that you went to what you can see that sends out a particular senora Audi Audi Geely, well Nintendo until dodging here.

So she wants it shows the chicken because that's what I thought you guys did what I think are.

Globally.

So if we.

Take a take or pay on the plot woman. So a healthy I'd say, let's say go straight thought you thought you got particularly shelf either you don't want to have we couldn't show all that you can tell me if I'm sort of to each other you don't want to have we couldn't show technical cause nickel mines with him and so he will take us through them and you can say the eats and good to see the Dod.

Gee I wish I still am a search yet now you Simpson her father and a teacher a non intensive but she's also leave at week one of your friends as well as she wanted to call that you can call them. There. So we feel good.

We take a single tons, all Juliet nimble way, it's like a futon couch here.

Our shingles, either but you saw some of it was simply a father and two how did you what should I told him. The culture. So you say to the song Man woman. He sits out in Florida, which you should sounds well I'll take the knot Jim can you dig in.

Cause I should finish up here.

Thank you well you asked about the the biggest challenge faced by by Alibaba Alibaba.

Like any other company.

Anywhere is like a micro cell in the social organism.

Alibaba is where it is today and has achieved success.

Because of the overall economic growth story, the tremendous successful economic growth story of China that has provided the opportunities that have allowed us to succeed over over the years and going forward. We would certainly hope to continue to see China continue to get better see social development continued to make progress.

Cuz are the bigger and better the pond, the bigger and a healthier the fish in the pond can become.

Uh huh.

And we can further help people realize their aspiration for a better life as things get better across the board. So certainly the macro environment is an important underpinning our going forward as it has been in the past.

But as a a micro cell in that social organism Alibaba continues to practice social responsibility, we seek to create jobs to empower Smes and two a better marry technology with Congress for the betterment of society, we've always done that and we will continue to do so.

They take the Chisholm.

Shanghai, Guangzhou and tie the audiology chisel it take a while Mr. Lou does like a nickel we will use what we call a food that she is a woman to so the junior and she used to watch it lets say two bulk with it since I just wasn't vision two languages. So he will envision the stay on the Eagle take Oh.

I was inside a cool dividends how does it go.

Well most of it you would you want to tell them that you could just take a so it's still a question on how you do that with Sunshine, you've got usually you shouldn't.

Shouldn't that somehow is such you have to take a buyer for it to allow us to take a shingle things like Union and see the Dodgers MPA your whole, Russia Uh huh.

Also with US is yeah, well managing in England E Con dollar take a you see a whole bunch in quantities shipped were trading she thinks about what each into a phone you kind of a heightened gentleman Oh, well machine Yens until you were chasing into changing the attach rate of inkjet P isn't I'd say take a share that you thought those with Ito at eating some golf I think I'd say sue them if she wants to.

So you show this as a whole and then go away. So we take a she always subway nickel is supposed to come to you and hopefully as the audience Susan the shiel NGO Baton negotiation issue yet.

None go jostle cig, a woman so and good to see so each allergy season Yenching does it youll see Youll Julia Suiter holding constant are you guys seeing Sunday she had a nickel on it particularly.

Hi, Nicole teaching him does he go see a nickel you'll put on machine that's functioning tissue.

You also asked about talent and talent is of course, absolutely critical for Alibaba, we rely on talent to do everything that we do to serve our customers are our talent base as are our store of extremely valuable knowhow within the company. So of course, we continue to.

Treasure, our talent and invest in talent and to recruit high quality talent and on that note I can share with you now that we're in in August at the time of year. When a university graduates have just left college and are looking for jobs and.

Despite all of the macro uncertainties that we see out there I'm pleased to tell you that we've hired a 6000 fresh university graduates.

From across China, most of them have already reported to work and are on the job at.

At Alibaba. So this of course is an important contribution that the company is making to society by providing these jobs are of course, it's also something that Alibaba very much needs we need to continue.

To stay fresh we need to take on that fresh blood.

If you like this is refreshing the metabolism of our company, which is indeed, a young Internet company, but one with some considerable history that needs this kind of ongoing refreshment.

So we shall see when you've got that wouldn't draw. The simulation you wouldn't daughters, you guys seem to Xeljanz as you probably know Lindsay I'll wish you want to take a ciena ciena Swooshing Latanya, Chile central virtual I'll take that so I'll leave it yet would you sell it sounds that Ali the Cushing and south of the city all like hundreds as you've seen that's used with a true she has seen the time yet to ship.

And then at least shows the other part of your question had to do with new investment.

Investment opportunities and emerging new growth areas.

But the fact is that there will always be an infinite number of new technologies and new industries are on the rise, but for any company and for Alibaba, we need to view those opportunities through the lens of our core strategy.

Just like people that you can get in each and other she move and it sounded <expletive> Gee, we got to see that she thought that you're going to <unk> 19 in the RTL age out a single woman told them seemingly then that you would see the liza well muscle he embodies one of the easiest one to childhood you call each other cheaply.

So you don't.

Don't take that San Diego totally on time, yet to go.

Are you seeing father, she just should Sunday you couldn't call that you guys took what she didn't know J E. T. I'm puzzled. Please see the trend goes into Nogales was supposed to pay that down because how you.

Secondly, interest on who doesn't get chewed out that's where you'll see a tick up just a woman who conducts a fishing Hollywood Bowl core gentlewoman, Poland don't just a poll with bulk with hollander they'd have a new met of us I'd say actually it wasn't the doses without the Chelsea not ordeal. So people just don't gossip ordeal seeger metal versus what else shelf.

Yeah, I'd say a good context, what does she knew that a bogo she's holidays, you try and see what else is on the gel two well known shoot shingle down that's usually a quarter, let's dig a bit into the time constant on its equally yeah. So you would say, let's talk one woman since you did take a particular decided I'll take the wholesale side, so who knows when.

And John the idiot interested in social essential Ginger.

So I'm just kind of it sounded it avoids assortment. So that was only on Ali I'm soldiers on the shelf when it reaches out and what kind of pushing that usually it's not necessarily on let's see I'll call. It just sort of trade in a car. That's highly that you want to say thank god. It is shaping a new England. So some go your way to highlight it as well.

What are the things I saw him here youll shifts towards some going into Chile.

You'll hear US highlight you highlight sometimes we shouldn't assume that you would want.

So that's on the shelf.

Can you send a child, who she's a highlight either changing this is how cheap from Georgetown that equally bullish on sealy assortment to lead a function.

Yeah.

A new energy Ah is of course, a huge opportunity and for Alibaba we.

Seek to leverage that opportunity mainly in the context of our cloud business because as I've talked about.

In the Sunrise industries, new and emerging industries, it's possible to leapfrog.

To a higher level a faster.

Jumping past the previous development stages, you can quickly adopt these new technologies and fresh approaches. The same is also true of our autonomous vehicles, and the meta versus well linking that to our business consumption on logistics, so the meta versus in relation to consumption and autonomous.

Nichols in relation to our logistics, new energy is very much linked to our cloud business. So we're finding opportunities to leverage the emergence of these new technologies in these new industries.

Uh huh.

In our existing businesses viewing it through those lenses.

The other the other pieces of course globalization, you know I've often talked about our three core strategies of our consumption.

Cloud and globalization, a two horizontal and vertical.

So you know we're looking at how we can leverage these technologies in terms of commerce consumption and cloud, but also looking at whether some kinds of knowhow from China can be taken into global markets or whether in global markets. There. There are opportunities that can be pursued there, but those are continued to be our three core.

Core strategies.

Yeah.

Okay or thank you everyone for joining our conference call. Today. If you have any questions. Please feel free to reach out to the Alibaba IR team. Thank you.

Thank you that does conclude our conference for today. Thank you for participating you may now disconnect.

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