Alibaba Stock Surge. What exactly does this company do?

Alibaba Stock Surge

Alibaba stocks are surging. What does this company do and should you invest in this company? As Warren Buffett said; when you want to invest in stocks, look for a business you even want to own the whole company and buy it when the price is right.

Alibaba Yearly Revenue in Million Yuan

2012 – 20.025 billion Yuan

2013 – 34.571 billion Yuan

2014 – 54.504 billion Yuan

2015 – 76.204 billion Yuan

2016 – 101.143 billion Yuan

2017 – 158.273 billion Yuan

2018 – 250.266 billion Yuan

2019 – 376.844 billion Yuan

2020 – 509.711 billion Yuan

2021 – 717.289 billion Yuan

2022 – 853.062 billion Yuan

What exactly does Alibaba do?

Revenue by segments in 2021

China Retail Marketplaces (43%)

Tmall

An e-commerce website that allows brands to sell their products directly to customers. Number of active users in 2019, both Tmall and Taobao have 711 million users.

Taobao

An e-commerce website that allows merchants to sell through online stores, Alibaba make money by deducting sales fees.

Jihuasuan

Idelfish

Fliggy

It has the fifth largest in market share in China. Number one is Meituan 51.7%, number two is trip.com is 25.25%, number three is Tongcheng-Elong  9.5%, number four is Qunar 4.8% and number five is fliggy.com 4.8%

Tmall Global

An e-commerce website that allow foreign brand owners to open online stores and sell products directly to Chinese people. Many Chinese people like to buy brand-name products.

China Retail Commerce (23%)

Sun Art

Sun Art operates a hypermarket business. As of 2021, Sun Art has 491 hypermarket branches covering 236 cities in 29 provinces. Alibaba bought Sun Art’s shares twice. The first time Alibaba owned 21% of Sun Art’s stake. The second time it owns 72% of Sun Art’s stake. The acquisition of Sun Art is part of Alibaba’s new retail policy that aim to integrate online and offline shopping seamlessly.

T-Mall Mart

Freshippo

Freshippo or Hema is a supermarket opened in 2021. As of March 31, 2022 Freshippo has 273 stores. Customers live within 3 kilometers from Hema store can order delivery products through the app and have them deliver to their home within 30 minutes.

International Commerce Retail (5%)

Aliexpress

An e-commerce website that allows small to big businesses in China to sell their products to foreign countries. Aliexpress delivers to 190 countries. To accelerate shipping Aliexpress requires merchants to store their products in Alibaba’s warehouse. 

Aliexpress has delivery speed of 72 hours. In most countries it takes only 3 days to deliver. Cainiao Network has a system that connects to Chinese customs. Now, China’s customs process takes only a few minutes to get the goods out of the country.

Lazada

It is an e-commerce website. It does business in 6 countries including Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam.

Trendyol

It is an e-commerce website in Turkey.

Cainiao Logistics Services (5%)

Cainiao Network, a logistics business under Alibaba Group. It aims to deliver products across China within 24 hours.

Local Consumer Services (5%)

Wholesales (4%)

Alibaba.com

An online wholesale website that connects factories in China to foreign customers who want to buy products at wholesale price from China.

1688.com

It does B2B and B2C wholesale business in China.

Cloud Computing (8%)

Alibaba is the largest cloud service provider in China.

1. In China’s market Alibaba Cloud has 37% market share in 2021. 
2. Huawei Cloud has  18% market share in 2021.
3. Tencent Cloud has 16% market share in 2021.
4. Baidu AI Cloud  has 9% market share in 2021.
5. Other 20%

Alibaba is the world's third largest cloud provider. With the first is AWS and the second is Microsoft Azure. 

Digital Media & Entertainment (4%)

Innovation Initiatives & Others (1%)

Others (2%)

Ant Group

Ant Group is the owner of Alipay. Alibaba holds 32.65% stake in Ant Group.