Alibaba sees trillion-dollar volume potential in China
The e-commerce platform’s parent company, Alibaba Group Holding Ltd., said it aims to serve over 1 billion annual active consumers and achieve over $1.4 trillion in annual gross merchandise volume through its China consumer business by the end of fiscal 2024. The company’s China consumer business covers primarily its China retail marketplaces, digital media and entertainment, as well as local consumer services.
Speaking at Alibaba’s annual Investor Day in Hangzhou, Alibaba Group Executive Chairman and CEO Daniel Zhang told an audience of over 600 from the investing community that the Company remains true to the mission it laid out over 20 years ago of making it easy to do business anywhere. Empowering merchants with data technology and cloud intelligence is essential to fulfill this mission in the digital era.
According to metrics released during Alibaba’s annual investor day in Hangzhou, China on Sept. 24, the company had 730 million annual active consumers from its China consumer business during the 12 months ended June 30, 2019. While 85% of Chinese in developed areas use Alibaba’s China retail marketplaces, the penetration rate is only 40% in less-developed areas.
Together with approximately 130 million annual active consumers in its cross-border and global retail commerce business, Alibaba says it has approximately 860 million annual active consumers globally. The company’s longer-term global ambitions include having over 2 billion customers, supporting 10 million profitable small-to-medium enterprises (SMEs) and helping create 100 million jobs by 2036.
In addition, Alibaba’s Alipay mobile payment platform, had approximately 900 million annual active users in China. Together, Alibaba Group and Alipay parent company Ant Financial have around 960 million users in China.
“Today, we are creating and fulfilling new consumption needs with a view to focus on growing our digital consumer population as a whole,” said Daniel Zhang, chairman and CEO, Alibaba Group. “We can unlock tremendous synergies between our various consumer-facing businesses to convert and harvest incremental customers across the Alibaba digital economy.”
To help support its planned growth, the company runs the Alibaba Business Operating System, a suite of digital tools that connects Alibaba’s commerce ecosystem and its cloud intelligence technology with the goal of reaching more customers, better understanding their needs, and deepening engagement with them.
“We have always viewed technology through the lens of real business applications. We don’t view technology in isolation,” said Zhang. “We believe in the marriage of commerce and technology. This has always been Alibaba’s unique value proposition.”