Alibaba looks abroad as China growth slows
China’s Alibaba has told its investors that overseas e-commerce would be a key focus as it looks for new sources of growth after a difficult year at home.
Earlier this month, Alibaba Group Holding restructured its e-commerce business into separate China and international divisions, with the latter to be led by Jiang Fan, head of Alibaba’s flagship Taobao and Tmall marketplaces.
Alibaba Deputy CFO Toby Xu, making his first major public remarks since being named this month to take over as CFO, said that international e-commerce “will become one of the key growth drivers”, adding that 57 per cent of revenue for Cainiao, Alibaba’s logistics unit, comes from overseas.
Earlier in the two-day investor event which ended Friday, Alibaba said it had set a target of $100 billion in gross merchandise value (GMV) for Lazada, its e-commerce service for Southeast Asia.
Lazada generated $21 billion in GMV from September 2020 to the same month in 2021, the presentation showed.
Outgoing CFO Maggie Wu said that In the future, the company will break down the category into four sub-categories – China commerce, which includes its major domestic-facing e-commerce platforms; international commerce, which will include Lazada, AliExpress, and other overseas-facing sites; local-based services, which will include its food-delivery service Ele.me and its mapping service; and Cainiao, its logistics division.
There was also a nod to social welfare, with four of seven investment categories outlined by Xu related to initiatives such as rural revitalisation and China’s ageing population.
CEO Daniel Zhang, meanwhile, pledged to slash emissions from Alibaba’s supply chains and transportation networks by 50 per cent by the end of the decade.
Missing from the presentation was any mention of Ant Group, the financial services firm that is 33-per-cent owned by Alibaba.
Last year, Beijing intervened at the last minute to abort a planned $37 billion listing of Ant. Alibaba co-founder Jack Ma subsequently slipped from the public spotlight and Chinese authorities began a year-long regulatory clampdown.
In November, Alibaba slashed its annual revenue forecast for its current fiscal year, from an initial growth target of 29.5 per cent to between 20 and 23 per cent.
The company has been facing stiff competition from rivals including Pinduoduo, which has won over consumers in rural China, and ByteDance-owned Douyin, which has grown in China’s booming live-streamed e-commerce sector.
- Reporting by Josh Horwitz; Editing by Shri Navaratnam and Alexander Smith, of Reuters.