Alibaba Group Holding Limited (NYSE:BABA) Q1 2024 Earnings Call Transcript

So we say this within Alibaba. Everything we’re doing, all the services we have can be rethought and redone leveraging AI. And I think the same could be said for all players across all different industries and sectors.

Operator: Thank you. Your next question comes from Thomas Chong with Jefferies. Your line is open.

Thomas Chong: I have a question regarding the international business. Given that the strong performance that we are seeing across different countries just wanted to get the thoughts from management regarding the competitive landscape in different regions and our growth strategies. And then a follow-up question on that one is really about the logistics side. Given the strong performance of China, how should we think about the synergies between China and our international business to enhance the user experience?

Daniel Zhang: Yes. Actually, we reported a very good quarter. For our AIDC, our overseas digital commerce business and we are happy to see that our strategies after a couple of quarters efforts as we see a strong sign of success. And we strongly believe this is a sustainable trend. And as you asked, I think we are trying to find our unique position in the global market. And when we talk global market, we have very clear target by market, by region, not only by region, also by country because consumption is highly relevant to a culture and highly relevant to the local retail landscape. So we need to find our uniqueness, unique strength to create the real value to the customers in the destination country. Our unit advantage, of course, one of the advantage is the supply from China.

I think a choice model just to unlock the advantage by a consolidated integrated supply chain from end to end. So going forward, we’ll continue to scale up this model and together with the growth of the platform model and in different markets. And we have depreciated market strategy in some businesses. We are — we focus on cross-border. This is — could be a main cause for some businesses. But for some other markets, we focus on local to local as a main course, plus cross-border from China as a dessert. And also today make cross-border from China, maybe tomorrow, cross-border from other countries. And also, we are trying to leverage our strong coverage in China with our B2B business because we have a very successful B2B business, which basically have a very strong connection with our — with many Chinese exporters.

They are all SMEs. Some of them sell industrial products, but we have many of our borders sell consumer products. So this could be a huge, I mean, flying wheel to connect the integrated supply chain from B2B to B2C. So for your second — for your question about Tongyi and AIDC, I think this quarter is a very good example — show a very good example of how the synergies we can create between the — among the different business groups in Alibaba. So, I think the strong growth of IDC is one of the main reasons is our improved logistics and service experience together with a strong performance of our registered network. So for example, right now, we are providing a five-day global delivery, which means a global delivery within five days. If you can give customers thousand miles away, tens of sound miles away from China, a high certainty of the logistic experience.

This could be the best user acquisition tool and user acquisition model. So, if we can — if we combine these two together and see a very strong synergies and we’ll continue to do that, and on one hand is to enhance the assortment strategies to make sure we have the right supply. Second, to enhance the logistics and service standard and capability and to make sure customers can have their good experience. If they have a good experience in their first few try, they will be with us. I think they have — because with a good experience, right, the price point from China supply has a unique strength in the world.