Alibaba Zhang Yong: Ali'S Four Points Of Judgement And Layout For The Future

On the evening of October 13th, Alibaba Before the annual general meeting was held in Hongkong, group CEO Zhang Yong issued an open letter to shareholders to exchange with shareholders on the development of Ali group in the past fiscal year, and expounded Alibaba's four points of judgement and layout for the future.

In reviewing the 2016 fiscal year, Zhang Yong said that Ali responded with practical action. market Worries about China's economy have fulfilled the promise to investors before listing: the company's business is developing rapidly and healthfully, GMV has maintained rapid growth, completed a comprehensive wireless spanformation and reached a higher level of wireless business.

Zhang Yong said, 2016 fiscal year, Ali retail platform spanaction volume has crossed the important milestone of 3 trillion yuan, globalization, rural, big data cloud computing, three strategies have achieved high-speed rush and substantive results, further formed the big data based e-commerce, gold, logistics, cloud computing and other modern commercial infrastructure, to help the small and medium-sized enterprises and various partners to use the power of the Internet to complete the comprehensive spanformation of the business. Meanwhile, the three emerging sections of cloud computing, digital media and entertainment, and innovation projects are rising. The next generation of business such as Gao De, Ali travel, nails, leisure fish, IOT operating system YunOS takes off, and Ali's ecological boundaries are constantly expanding.

In an open letter, Zhang Yong explained to investors the four points of judgement and layout for the future based on the current broad ecology.

First of all, the entire consumer goods retail industry is undergoing comprehensive commercial Internet spanformation. The comprehensive convergence under the online and offline industry is the general trend. "The great opportunity we see today is not how to upgrade online sales from 3 trillion now, but to help traditional zero sale upgrading become a new retail opportunity: how to make full use of Internet thinking and technology to reform and upgrade the total volume of about 30 trillion of the total retail sales of goods so that the consumer demand of Chinese consumers can be effectively satisfied, making the whole process of commodity production, circulation and service more efficient because of the wide use of the Internet and big data."

　　 Secondly, the marketing mode of new consumers based on big data across the media is emerging. Over the past year, big data driven multi media digital marketing platforms across UC, Youku, Sina micro-blog, Tmall magic box OTT Internet TV platform have formed a huge synergy with Tmall and Taobao's retail platform, "life entertainment +" Electronic Commerce "Chemical reaction continues to ferment, pan marketing platform has begun to take shape. Businesses have begun to benefit from the ecological prosperity of" electricity supplier + content ".

Third, cloud computing and big data will be widely used in all aspects of social and economic life. Zhang Yong said that with the advent of the era of Internet of things, Alibaba group will take cloud computing and big data as a breakthrough point to provide basic services for all commercial enterprises entering the era of Internet of things.

Fourth, the future business spanformation is more and more dependent on the innovation of new technology. Zhang Yong believes that under the rapid development of the new generation technology represented by artificial intelligence, AR, VR and IOT, how to rely on the vast commercial ecology of the Alibaba group to make the innovation technology obtain a huge application scenario, and then promote the new business mode with the maturity of new technology, is the core issue of the future development.

On the same day, Ma Yunfa, chairman of Alibaba's board of directors, exchanged letters with shareholders. He also said that in the next 30 years, data as new resources, computing as a new technology, will trigger new changes in new retail, new manufacturing and new finance. Alibaba will build infrastructure for the next 30 years.

Zhang Yong attached the letter to shareholders.

Respected Ali investors:

It is a great pleasure and privilege to share with you the development of Alibaba group in the past fiscal year and our judgement and action in the future.

First of all, I want to thank you for giving Alibaba group's attention and support as before. Alibaba is a mission and vision driven company, and insists on the combination of idealism and realism. In the past 2016 fiscal years, under the pressure of China's macro-economy and the rapid development of the new economy driven by the Internet, the rapid and healthy development of Ali's business has responded to the market's worries about China's economy with practical results, and has also carried out the mission of "making it difficult to do business under heaven".

Alibaba group is also listed just 2nd anniversary. We have also completed the commitment to investors before the listing. Our GMV has maintained rapid growth, completed a comprehensive wireless spanformation and reached a higher level of wireless business.

Ali ecological boundaries continue to expand the three core strategy of high-speed penetration

Last year, Alibaba group identified three core strategies for the future: globalization, rural and big data cloud computing. In the 2016 fiscal year, these three strategies have made rapid progress and substantive results, and further formed a modern commercial infrastructure based on big data, such as e-commerce, finance, logistics, cloud computing, etc., to help SMEs and all kinds of partners to make full use of the power of the Internet to complete the business spanformation. Ali ecosystem is also more perfect and healthy, and all business sectors interact with each other, maintaining high-speed growth.

On the basis of good ecology, we create more convenient life scenes for consumers, change and lead the trend and trend of consumption, and provide rich choices and possibilities for upgrading consumption. Therefore, we have also been favored by more users, especially young users. We have become part of their lives. At present, more than 75% of our total users are under 35 years of age.

In fiscal year 2016, Alibaba group's retail business represented by Taobao and Tmall for the first time exceeded 3 trillion yuan, becoming the largest retail platform in the world. The number of active retail users continued to grow to 423 million. At the same time, Alibaba group has completed the wireless upgrade and achieved great success: in the fourth quarter of fiscal year 2016, the proportion of Ali wireless spanactions reached 73%, compared with the 2015 quarter of fiscal 2015, has a huge growth. In addition, with the privatization of Youku, the rapid growth of Ali's travel and word of mouth, the scope of Ali's e-commerce is rapidly expanding from physical commodities to digital content, local life services and so on. We think this will become the next explosive growth point.

As of March 2016, Ali's rural Taobao partners had covered more than 14000 villages. Through the service of rural partners, the farmers in these villages can enjoy the same products and services of the townspeople through the Internet, and help them sell the rural products to the townspeople through the Internet. More and more global brands have entered the rural Taobao system to help them quickly reach China's vast rural market.

During the just concluded G20 Hangzhou summit, Ali proposed the idea of building eWTP (World e-commerce platform) with governments, business organizations and partners all over the world. The aim is to create a truly free and fair trade platform for small and medium-sized enterprises all over the world. EWTP has been highly recognized by many leaders and is entering the stage of implementation. In addition, we have opened business offices in Italy, France, Germany, Holland, Australia and other countries to help businesses in these countries sell products to hundreds of millions of Chinese consumers through Tmall and Tmall international. At the same time, Alibaba group also invested in Southeast Asia's electricity supplier platform Lazada, officially entered the Indonesia, Malaysia, Singapore, Thailand, Vietnam, Philippines and other countries in the local market.

In the 2016 fiscal year, Ali cloud took off one year, and Ali cloud continued to grow at a speed of over 100%. By the end of 2016, the number of paying customers for Ali cloud services has reached 500 thousand. Relying on Ali electricity, finance, logistics platform has formed a huge scale advantage, and the electronic business platform middleware capabilities, security capabilities and other output services on the cloud cloud platform customers. At the same time, Ali cloud has also created a new ecosystem, which is not only reflected in the continuous growth of the number of service providers on Ali cloud platform, but also reflected in the system of training certification and government cooperation built by Ali cloud. In short, Ali cloud's service has become a unique competitive power and ranks among the world's leading cloud providers.

Along with the rapid development of UC and other businesses, the acquisition of Youku, Ali music group, Ali Sports Group's establishment, and Ali's strategic investment in Sina micro-blog, the layout of Ali's digital media matrix has begun to take shape. As a result, Ali has actually formed a multi screen, multi terminal, multi form consumer media and community matrix. The establishment of Ali Da Wen Yu plate indicates that Ali's practice of "happy strategy" has entered the next stage.

Ali always used the vision of development to lay the future. In the 2016 fiscal year, while we are gaining strong growth, we continue to hatch the next generation of business such as travel, nail, fish and IOT operating system YunOS.

In addition to the rapid development of its own business, Ali also focuses on logistics and local life services through the participation of rookies and word of mouth. Rookie, aiming at creating intelligent logistics, has initially formed five logistics networks, including express delivery, warehousing, terminal, village and cross border, providing services for logistics parcels which exceed 40 million per day on the platform. In the three months ended March 31, 2016, word of mouth has reached 21 billion yuan through Alipay.

Our four points of judgement and layout for the future

Alibaba is always a company based on the present and future. Standing on the milestone of over 3 trillion yuan in retail sales, we have the following points to judge and layout the future business trends:

The entire consumer goods retail industry is undergoing a comprehensive spanformation of the Internet business.

Online and offline integration is the general trend. The great opportunity we see today is not how to upgrade online sales from the present 3 trillion, but to help traditional retailers upgrade to become new retail opportunities: how to make full use of the Internet's ideas and technologies to reform and upgrade the total volume of about 30 trillion of the total retail sales of social products, so that the increasing consumption demand of Chinese consumers can be effectively met, making the whole process of commodity production, circulation and service more efficient because of the wide use of the Internet and big data.

Big data driven multi media digital marketing platforms that span UC, Youku, Sina micro-blog, Tmall's box OTT Internet TV platform, and so on, form a huge synergy with Tmall and Taobao's retail platform, providing brand operators and advertisers with the position of consumers in the whole life cycle, forming a new marketing mode based on big data for the global operation of consumers.

Cloud computing and big data will be widely used in all aspects of social and economic life. Data has become a new source of energy as important as petroleum, electricity and other basic energy sources. Computing power is the engine of business operation. Ali cloud will serve all kinds of enterprises in various industries, and gradually form a diversified industry ecosystem. With the advent of the Internet of things era, Alibaba group will take cloud computing and big data as a breakthrough point to provide basic services for all commercial enterprises entering the era of Internet of things.

The future business spanformation is more and more dependent on the innovation of new technology. With the rapid development of the new generation technology represented by artificial intelligence, AR, VR and IOT, how to rely on the vast commercial ecology of the Alibaba group to make the innovation technology obtain a huge application scenario, and promote the emergence of new business models with the maturity of new technologies, is the core issue of the future development.

Our organization is younger, diversified and internationalized.

With the rapid development of Ali's business and the continuous expansion of our ecology, we have put forward higher requirements for our organization and culture.

In the past fiscal year, we began to organize innovation, try to break the tree structure, and create a more suitable network structure in the future. In the complex business composition and ecological system, a big picture of a group is formed, and the various functional units work each other and cooperate with each other. In the process, there are excellent young managers emerging. At present, more than 52% of Alibaba group managers are young managers born after 1980.

At the same time, with the deepening of ecological diversity and internationalization of Ali, we have absorbed a large number of senior professionals from various industries to join the company. We have also set up offices in many countries around the world to recruit outstanding overseas talents who identify with Alibaba's mission and culture. I believe they will play an important role in the future development of Ali.

Dear investors, I would like to express my deepest gratitude to you at the very end of the letter. All achievements of Alibaba group are not achieved by Alibaba. This is inseparable from the trust and support of all participants, including you. Please believe that under any circumstances, we will stick to our original intention and create value. Please believe that our common future will be better and better.

Zhang Yong

Alibaba group CEO

October 13, 2016