A rebuttal to BABA Black Sheep
"Incoming regulations that curtail Ant's lending abilities could drastically impact top-line revenue growth for Taobao and Tmall".
Not so sure, its going to have that big an impact. Not sure how you got the $250B+ consumer book, but the Ant prospectus says 2K/average loan and 500m consumer credit users. that's 1000b RMB in consumer credit. Thats 13% of Taobao/tmall GMV, assuming all of it was baba. Assuming half was baba, its <6% of mktplace gmv.
1)Prior to BABA'S acquisition, Ele Me was already behind Meituan. Given the revitalization put in place starting from last year, such as, using alipay to provide traffics to Ele me, Ele me may start outperforming in terms of growth. 2) Competition from livestreaming is mirror. A platform with strong traffic, such as DOUYIN & KUAISHOU, does not mean they will succeed in ecommerce. Think FB or Tencent.
3) the user side analysis across different ecommerce platforms is just one part of the stories. The merchants is another side we should not ignore. BABA'S competitve position in the categories of apparel and beauty ( high margin and high penetration) is well understated. Hardly image other platforms will be able to complete.
4)Growth opportunities: new retail has lot of potentials to go, the digitalization need from the merchants on its platform is huge. Remember the rhino smart manufacture announced last September or October?
5) Corporate culture. BABA has one of the best corporate culture in China and the optionalities, along with its innovative culture (think about how it got started and what it has now) make me not too worry about its growth particularly given its current valuation.
I think their cloud computing services still have lots of potential to grow. It takes massive computational capacity to handle the number of online orders the scale of that on 11/11 shopping day. If they can milk every bit out of those HPC servers they’ll make a good fortune. Although admittedly I do see the move of trying to profit from financial products/loans as a sign of their original business slowing down, and this applies to most tech businesses. (*cough* apple, I’m talking about you too *cough*)
Great & fair response to Packy's Not Boring post. He's naturally a very hyper bullish person and writer, I always have to tamper down my own expectations.
It's very hard to think about how bloated Alibaba is, every time I look at the portfolio graphic it seems it has doubled, so that is something to consider.
I don't think anyone should dismiss the growth prospect of Alibaba's cloud and B2B Segments. Someone will crack B2B/cloud/saas in China, Alibaba is in a great position.
Also expansion into tier 3-5 cities I feel Alibaba will be in better position as they are behind they will be ideally more effective and aggressive.
But yes people outside of China really are not paranoid enough about the battle royale competition, the new big three (ByteDance, PDD & Kuaishuo) is less bloated, more focused and have better position in those tier 3-5 cities you talked about.