Alibaba

Incredible Business
Ecosystem
GROUP 1: #BLACKPINK
ANDREW DJAUHARY (00000055497)
KRESNA ADITYA (00000056534)
MAWAR MUSTIKA (00000056764)
MEIRINA (00000056001)
 Alibaba’s Company Profile
Alibaba is a Chinese giant that
specializes in e-commerce,
01 retail, internet, artificial
intelligence and technology

Alibaba was founded in 1999,

02 by Jack Ma.
Operate in more than 200 countries
around the world, with various
businesses and various sectors. Alibaba
provides e-payment services, shopping
03 search engines, and cloud computing
services, as well as consumer, business

PAY and business-to-business sales services

through a web portal etc.

Alibaba Ecosystem offers the most

04 comprehensive range of products and
services among global commerce
platforms to meet the diverse demands
of our massive and growing consumer
base across different segments.
Brand Under Alibaba THE ALIBABA CULTURE IS ABOUT
CHAMPIONING SMALL BUSINESS.

All participants in Alibaba ecosystem – consumers,

merchants, third-party service providers and others –
have an opportunity to prosper. Alibaba’s success and
rapid growth is built on the spirit of entrepreneurship,
innovation, and an unwavering focus on meeting the
needs of customers
 FINANCIAL PERFORMANCE

02

01 Total GMV transacted in the Alibaba

03
Ecosystem was USD1,239 billion for
fiscal year 2021, which primarily
included global retail marketplaces
For fiscal year 2021, the group GMV of USD1,144 billion
company reached a milestone
and served over one billion Alibaba generated approximately
annual active consumers through 66% of USD109 billion total
revenue from its retail commerce
SHOP
our consumer-facing businesses
in the Alibaba Ecosystem, business in China and Net Income
including 891 million in China and of USD21 billion.
approximately 240 million
consumers outside China.
Income Statement of Alibaba 2017 - 2021 Profitability Ratio
• Alibaba's financial performance
continues to grow 52,1 %
(March 2020 vs March 2021)
despite the covid1-9 pandemic.
• Gross profit on March 2021 up
to 4,1% vs March 2020
• Net income growth 8,8% in
March 2021.
• Operating expenses March
2021 up to 62,4% then March
2020.
• Revenue growth Alibaba from
2017 up to 376%.
 BALANCE SHEET 2021 vs 2017

• For fiscal year 2021, the

group company has a strong
cash position of USD79
billion against its total Asset,
Liabilities, and Equity of
USD257 billion, USD93
billion, and USD164 billion,
respectively.

• Alibaba’s Equity has been

increasing with consistent
growth throughout 2017 to
2021 with an average of 38%
annually with the highest
growth of 50% in 2018
period.
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 Financial Performance
For fiscal year 2021, Alibaba group company financial ratio is showing excellent performance. A strong profitability ratio
41% Gross Margin on Revenue and 20% Net Profit Margin on Revenue. In addition to a strong liquidity ratio shown in
the company financial performance of 1.7 Current Ratio and a very strong financial health of the company with 0.13
Debt to Equity Ratio.

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BABA 10 YEARS REVENUE AND EPS HISTORICAL

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FORECAST ANALYSIS:
BABA 10 YEARS NET INCOME FORECAST

EPS (cash flow) annually increased by 38% based on 5 years 2017-2021

In 2031 EPS Present value : 93.53 (20x increase in the next 10 years)

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VALUATION ANALYSIS: STOCK HIGHLIGHTS

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VALUATION ANALYSIS: STOCK PRICE HISTORICAL

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VALUATION ANALYSIS

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MACRO ANALYSIS
 INDUSTRY ANALYSIS: COVID-19 GLOBAL ECONOMY IMPACT
● Due to the pandemic impact, the Asian economy contracted by 1.5
percent in 2020, while the world economy shrank by 3.2 percent.
(Source: McKinsey.com).
● According to McKinsey, with the continuing spread of the novel
coronavirus pandemic, organizations across the globe are gradually
flattening their recessionary curve by leveraging technology. Many
businesses will go through response, recovery, and renewal phases.
Building business resilience and enabling agility will aid organizations
to move forward in their journey out of the COVID-19 crisis towards
the Next Normal.
● The recovery process involves various phases including:
 Addressing potential impacts by facilitating changes in
business process.
 Identifying potential economical disruptions.
 Conceptualize scenario-based planning to mitigate future
crisis situations.

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 GLOBAL DIGITALIZATION
● At a global level, nearly 77% of internet users between the age 16 to 64 say they buy something
online each month.
● Internet users in Indonesia are the most likely to make ecommerce purchases, with more than 87
percent of the country’s respondents to GWI’s survey saying they bought something online in the
past month.
● Social media user numbers increased by more than 13 percent over the past year, with nearly half
a billion new users taking the global user total to almost 4.2 billion by the start of 2021.
● On average, more than 1.3 million new users joined social media every day during 2021, equating
to roughly 15 new users every single second.

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 FUTURE E-COMMERCE OUTLOOK
● US retail e-commerce sales will grow 13.7%, reaching $908.73 billion in
2021. Prior to the pandemic, expected sales would grow just 12.8%.
Business-to-business (B2B) ecommerce statistics also show continued
growth in 2021.
● 2021 looks to build on this incredible momentum, leveraging the tools and
trends that defined a monumental year for online shopping. The brands
and retailers that adapt will not just survive a rapidly changing retail
landscape but set themselves up to thrive for years to come.
● United States is in the top 10 at $340 billion, it is second to China at $672
billion. Spain leads in travel at $67 billion, while South Korea at $37 billion
leads many markets, including fashion, beauty products and nonfood
household groceries. These numbers show potential in targeted marketing
and areas for growth in different industries.
● The global e-commerce market exhibited strong growth during 2015-2020.
Looking forward, IMARC Group expects the market to grow at a CAGR of
around 16% during 2021-2026. Keeping in mind the uncertainties of
COVID-19, continuously tracking and evaluating the direct as well as the
indirect influence of the pandemic on different end use industries. These
insights are included in the report as a major market contributor.
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Retail e-commerce sales worldwide from
2014 to 2024 (in billion U.S. dollars)

Source: www.statistica.com
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20
Retail e-
commerce sales
CAGR forecast in
selected
countries from
2021 to 2025

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 FUTURE CLOUD OUTLOOK
● Worldwide end-user spending on public cloud services is
forecast to grow 23.1% in 2021 to total $332.3 billion, up from
$270 billion in 2020, according to the latest forecast from
Gartner, Inc.
● Despite macroeconomic headwinds, offerings that support or
deliver public cloud services are experiencing tremendous
growth. Software as a service (SaaS) remains the largest
market segment and is forecast to reach $122.6 billion in 2021
as the demand for SaaS increases. Infrastructure-as-a-service
(IaaS) and desktop-as-a-service (DaaS) will see the highest
growth in 2021, 38.5% and 67.7%
● Cloud Computing Market size in 2020 is estimated at $283
billion, growing at a CAGR of 12.8% during the forecast period
2021-2026. Cloud computing is one of the most commonly
used applications in healthcare, BFSI and IT sectors.

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 COMPETITION
● The competitor companies categorized in region include:
○ Competition principally comes from established Chinese e-commerce companies, such as Tencent, PinDuoDuo and
JD.id.
○ Global and regional e-commerce players such as Amazon, e-Bay, Shopee, and Walmart.com.
○ Local e-commerce players such as Tokopedia.
○ Cloud computing service providers, such as Amazon.

● The target market type in which Alibaba compete primarily include:

○ Consumers: Alibaba compete to attract, engage and retain consumers based on the variety, quality and value of
products and services listed on our platforms, the engagement of digital media and entertainment content available on
our platforms, the overall user experience of our products and services and the effectiveness of our consumer
protection measures.
○ Merchants, Brands, Retailers and other Businesses: Alibaba compete to attract and retain merchants, brands and
retailers based on the size and the engagement of consumers on our platforms and the effectiveness of our products
and services to help them build brand awareness and engagement, acquire and retain customers, complete
transactions, expand service capabilities, protect intellectual property rights.
○ Marketers: Alibaba compete to attract and retain marketers, publishers and demand-side platforms operated by
agencies based on the reach and engagement of our properties, the depth of consumer insights and the effectiveness
of our branding and marketing solutions.
○ Talent: Alibaba compete for motivated and capable talent, including engineers and product developers to build
compelling apps, tools, and functions and to provide services for all participants in its ecosystem.

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 CORE COMPETITOR ANALYSIS
● Alibaba biggest global competitor would be Amazon.
● Alibaba competes with Amazon in 4 major core sectors: e-commerce, logistic
supply chain, cloud intelligence PaaS, and financial service.
● In global e-commerce Amazon rank first while Alibaba rank second.
● In global supply chain Amazon rank first while Alibaba rank second.
● In global cloud service Amazon AWS rank first while Alibaba Aspara rank
fourth, trailing behind Microsoft Azure and Google Cloud.
● In global financial Alibaba Alipay/Ant Financial rank first while Amazon Prime
rank second.

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 ALIBABA VS AMAZON INCOME STATEMENT

Since 2017, net income have surpassed all U.S. retailers including Walmart, Amazon, and eBay.

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 ALIBABA VS AMAZON EARNING PER SHARE

Comparison between Alibaba and Amazon shows empirical evidence that the e-commerce and cloud business is a sustainable growing
future business with both enterprise showing incredible growth of at least 20%/year. This fast expansion exceeds conventional legacy
businesses business process in comparison with their disruption and agility in penetrating the consumer market.

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ALIBABA VS AMAZON STOCK HIGHLIGHTS COMPARISON

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STOCK PRICE HISTORICAL COMPARISON

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MICRO ANALYSIS
COMPANY ANALYSIS
4 Segments of Alibaba Business
● Core commerce: The core commerce segment is comprised of platforms and businesses
operating in retail and wholesale commerce in China, retail and wholesale commerce – cross-
border and global, logistics services, Local Consumer Services and others.
● Cloud computing: The cloud computing segment is comprised of Alibaba Cloud, which offers a
complete suite of cloud services to customers worldwide, including elastic computing, database,
storage, network virtualization, large scale computing, security, management and application, big
data analytics, machine learning platform and IoT services.
● Digital media and entertainment: The digital media and entertainment businesses leverage our
deep consumer insights to serve the broader interests of consumers through our key distribution
platform, Youku, and through Alibaba Pictures and our other diverse content platforms that
provide online videos, films, live events, news feeds and literature, among others. In addition, we
develop, operate and distribute mobile games through Lingxi Games.
● Financial Services: Digital Payment Services Ant Group provides digital payment services to
facilitate online and offline transactions, supports merchants to stay engaged with their
customers and accelerates the digital transformation of merchants’ offline businesses. Ant
Group continues to work with tens of thousands of independent service vendors, bringing offline
merchants greater access to digital operating capabilities via the Alipay open platform.

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 Alibaba is the leading company in digital commerce infrastructure that offers an upgraded
consumer experience by seamlessly integrating online and offline capabilities, primarily
including: product and supply chain, fulfillment and delivery, consumer management, and
CORE COMMERCE
social commerce channel development and operations.
 Taobao Marketplace is China’s largest social commerce platform growing 20% year on year in
2021. Tmall was the largest third-party online and mobile commerce platform for brands and
retailers in the world in terms of GMV grew approximately 23% year-over-year in the twelve
months ended March 31, 2021.
 1688.com, China’s leading integrated domestic wholesale marketplace in 2020 by revenue,
according to Analysys, connects wholesale buyers and sellers across a wide range of
categories
 Lazada, a leading and fast-growing e-commerce platform in Southeast Asia that connects local
consumers with local SMEs and regional and global brands. Lazada provides consumers with
access to a broad range of offerings, serving over 100 million annual active consumers in the
twelve months ended March 31, 2021.
 AliExpress and Cainiao Network’s logistics intelligence platform and global fulfillment network
that leverage our self-developed and our logistics partners’ capacity and capabilities. Both
networks offer domestic and international one-stop-shop logistics services and supply chain
management solutions, fulfilling various logistics needs of merchants and consumers at scale,
serving our ecosystem and beyond enabling them to buy directly from manufacturers and
distributors in China and around the world.
 Ele.me, a leading local services and on-demand delivery platform, to enable consumers to
order food and beverages, groceries, FMCG, flowers and pharmaceutical products anytime and
anywhere.
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 CLOUD PaaS
 Alibaba Group is the world’s third largest and Asia Pacific’s largest
Infrastructure as a Service provider by revenue in 2020 in U.S. dollars,
according to Gartner’s April 2021 report (Source: Gartner, Market Share:
IT Services, Worldwide 2020, Dean Blackmore et al., April 8, 2021) (Asia
Pacific refers to Mature Asia/Pacific, Greater China, Emerging
Asia/Pacific and Japan, and market share refers to Infrastructure as a
Service).
 Alibaba Group is also China’s largest provider of public cloud services by
revenue in 2020, including PaaS and IaaS services, according to IDC
(Source: IDC Semiannual Public Cloud Services Tracker, 2020H2).
 Alibaba Cloud, its cloud computing business, offers a complete suite of
cloud services, including elastic computing, database, storage, network
virtualization, large scale computing, security, management and
application, big data analytics, a machine learning platform and IoT
services, serving ecosystem and beyond.
 Cloud Operating System, Apsara, the proprietary core cloud computing
platform, enables to provide stable, high-performance and cost-effective
IT infrastructure solutions and a suite of cloud-native services, including
storage and databases.
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DIGITAL MEDIA AND ENTERTAINMENT
● Youku, the third largest online long-form video platform in China in terms of monthly
active users in March 2021, according to Quest Mobile, serves as key distribution
platform for digital media and entertainment content.
● Alibaba Pictures is Internet-driven integrated platform that covers content
production, promotion and distribution, intellectual property licensing and integrated
management, cinema ticketing management and data services for the
entertainment industry.

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 Through the Alipay app, Ant Group, together with its partners, primarily offers
convenient digital payment and digital financial services serving one billion
FINANCIAL SERVICES
consumers and more than 80 million small and micro businesses in China for
the twelve months ended March 31, 2021.
 Ant Group Ant Group provides comprehensive digital payment services and
offers digital financial services and digital daily life services for consumers and
small and micro businesses, in China and across the world. It collaborates with
global partners to bring sustainable, inclusive financial services to unserved
and underserved users.
 Ant Group partners with financial institutions, such as fund management and
insurance companies, to offer comprehensive wealth management products,
including money market funds, fixed income products and equity investment
products through Ant Fortune, its wealth management platform. During the
twelve months ended March 31, 2021, assets under management of Ant
Fortune’s partners recorded significant growth.
 Ant Group partners with banks and other lenders to provide small-amount,
flexible-term credit services to consumers and small and micro businesses.
Through extensive technology and risk management capabilities, Ant Group
enables its partners to deliver greater credit access to the unserved and
underserved populations.
 Ant Group partners with insurance companies to provide a full suite of
insurance product offerings, including innovative insurance products to meet
users’ unserved insurance needs for e-commerce and other daily life use cases,
as well as healthcare and life insurance products jointly developed with
insurance company partners.
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 BUSINESS STRATEGIES
 Innovation in the areas of business models, products
and services, and technology to create value for both
consumers and businesses.
 Strategies that aim to best serve consumers’ and
businesses’ interests that drive user’s growth and
engagement to Alibaba ecosystem.
 Customer orientation cater to user’s personal needs
focused on creating personalized, immersive and
interactive experiences for consumers by applying new
technologies to different industry verticals.
 Provide availability in broad range of products and
services across its ecosystem.
 Serving a large and growing consumer base, across
both large cities and less developed areas.

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LOGISTIC SUPPLY CHAIN

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 SUMMARY
● The digital industry during the pandemic was able to survive and
continue to grow as can be seen in the financial performance of
Alibaba and Amazon.
● Alibaba is a pretty good tech business company because the valuation
is cheaper compared to amazon, even though Amazon has had a
significantly more growth rate on Amazon in the last five years
compared to Alibaba.
● Alibaba's forecast valuation in the next 10 years will grow 20x (from
8.35 EPS to 201).
● Alibaba's business in the next 10 years will continue to grow from its
core business, namely e-commerce, cloud, and finance.

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Alibaba in CNBC Review

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● https://www.mckinsey.com/business-functions/risk-and-resilience/our-
insights/covid-19-implications-for-business
● https://fiskal.kemenkeu.go.id/ejournal/index.php/kek/article/view/678
● https://www.macrotrends.net/
● https://www.statista.com/statistics/379046/worldwide-retail-e-
commerce-sales/

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