Alex Yao

Alex Yao from JPMorgan Chase & Co. questioned how cost savings from quick commerce efficiency optimization would be allocated among consumers, merchants, and the platform, particularly regarding subsidies and the future scope for Unit Economics (UE) growth.

Answer

Jiang Fan, CEO of Alibaba E-commerce Business Group, explained that enhanced user experience and increased average order value boost revenues per order, complemented by optimized logistics efficiency. He sees considerable future UE improvement by converting new quick commerce users into sticky platform users, increasing average order size, and dynamically adjusting subsidies. He highlighted the rapid growth to over 100 million daily users on the Taobao app's quick commerce channel as a significant monetization opportunity, while acknowledging the competitive market.

Alex Yao from JPMorgan Chase & Co. questioned how cost savings from quick commerce efficiency optimization would be allocated among consumers, merchants, and the platform, particularly regarding subsidies and the future scope for Unit Economics (UE) growth.

Answer

Jiang Fan, CEO of Alibaba E-commerce Business Group, explained that enhanced user experience and increased average order value boost revenues per order, complemented by optimized logistics efficiency. He sees considerable future UE improvement by converting new quick commerce users into sticky platform users, increasing average order size, and dynamically adjusting subsidies. He highlighted the rapid growth to over 100 million daily users on the Taobao app's quick commerce channel as a significant monetization opportunity, while acknowledging the competitive market.

Alex Yao asked about the mid-to-long-term monetization strategy for Taobao and Tmall, questioning the factors considered when balancing take rates against competitor levels and merchant ROI. He also sought clarity on whether recent monetization initiatives, like the new software service fee, are part of a multi-year plan for continued rate increases.

Answer

CFO Toby Xu explained that the primary business objective is to stabilize market share, with the monetization rate reflecting that position. He noted that new products have successfully improved monetization from previously under-tapped merchant segments, like white-label sellers. Xu stated that while the company will continue to innovate with monetization products, including AI-driven tools, future increases will be based on achieving GMV growth and market share stability, rather than a predetermined multi-year schedule.

Alex Yao inquired about the mid-to-long-term monetization strategy for Taobao and Tmall, questioning the factors considered when setting the take rate, especially in comparison to competitors' higher rates. He also asked if the recent monetization initiatives, like the new software service fee, are the beginning of a multi-year cycle of increasing monetization.

Answer

CFO Toby Xu explained that the primary business objective is to stabilize market share, and the monetization rate reflects that. He noted that new products have successfully improved monetization from previously under-monetized merchants, and payment commissions have also contributed. Looking forward, he confirmed that Alibaba will continue to innovate with new monetization products, including those leveraging AI, to enhance the take rate after first ensuring GMV growth and market share stability.

Alex Yao inquired about Alibaba's supply chain strategy, particularly in light of a perceived slowdown in live-streaming e-commerce, and asked about the company's focus on brands versus white-label goods and agricultural products.

Answer

Executive Yongming Wu countered that live-streaming on Taobao and Tmall has seen strong growth by creating synergies with high-quality brand stores. He stated that in a slower market, brands prioritize platforms that drive sales, which benefits Alibaba. Regarding product mix, Wu affirmed the focus remains on branded goods for core VIP members, but the company will adapt its supply to meet potential new demand for white-label goods from new user cohorts.

Alex Yao of JPMorgan Chase & Co. asked about the commoditization of AI models and compute power, citing the DeepSeek model, and questioned where Alibaba sees the highest potential for AI-native applications.

Answer

CEO Yongming Wu responded that it's still early days for AI business models. He noted that while model differentiation is narrowing, all models require cloud computing, making cloud hosting the clearest monetization path. Wu identified high-potential internal applications within the Taobao app, Quark (AI search), DingTalk (enterprise collaboration), and Amap (local services) to enhance user engagement and create value.

Alex Yao inquired about WeRide's perspective on the robotaxi business in China, future economic changes for both China and international markets, and the replicability of the Abu Dhabi driverless milestone in other markets, including global fleet expansion plans, catalysts, and hurdles.

Answer

CEO Tony Han described China as a unique and important market for technology proving and innovation, aiming for profitability in tier-one cities through city-level driverless permits, high daily orders, and healthy pricing. He expressed confidence in replicating the 'Abu Dhabi model' in similar markets like Dubai, Riyadh, and Singapore, citing the 'meteor effect' as a catalyst and regulatory issues as hurdles.

Alex Yao questioned WeRide's perspective on the robotaxi business in China and how the unit economics are expected to evolve in both the Chinese and international markets. He also inquired about the speed at which the Abu Dhabi driverless milestone can be replicated in other markets, WeRide's global fleet expansion plans, and the associated catalysts and hurdles.

Answer

CEO Tony Han described China as a crucial, unique market for technology proving and operational innovation, targeting profitability in Tier 1 cities through city-level driverless permits, high daily orders, and healthy pricing. He highlighted current operations in Guangzhou and Beijing and the 'Pudu service' for improved user experience. He then explained the 'meteor effect' of the Abu Dhabi model, targeting similar markets like Dubai, Riyadh, and Singapore, and identified regulatory issues as the primary hurdle while successful experience acts as a catalyst for obtaining more permits.

Alex Yau questioned how user behaviors are changing as Baidu App evolves into an AI application and web search integrates AI chatbots, and what Baidu's competitive strategy is for this blurring line between search and chatbot.

Answer

EVP Dou Shen explained Baidu's strategy involves two complementary offerings: ERNIE Assistant, a built-in chatbot in Baidu App with deep search integration and task completion tools, which saw a five-fold increase in conversation rounds year-over-year and surpassed 12 million DAU; and ERNIE Bots, a standalone, experimental chatbot app focusing on retention and cutting-edge multimodal features. Shen highlighted the future of AI interactions as multimodal, real-time generative, and interactive, exemplified by the upgraded Bo Yonghao digital human.

Alex Yau questioned how user behaviors are evolving as the Baidu App integrates AI and search blurs with chatbots, and outlined Baidu's competitive strategy in this changing landscape.

Answer

CEO Robin Li explained Baidu's dual approach with Ernie Assistant, a built-in chatbot in the Baidu App, and Ernie Bots, a standalone experimental application. He highlighted Ernie Assistant's five-fold year-over-year increase in conversation rounds and over 12 million DAU, emphasizing its deep search integration and task completion capabilities. Li stressed the future of AI interactions will be multimodal, real-time, and generative, citing the upgraded Bo Yonghao digital human demo as an example of continuous innovation to enhance search intelligence and personalization.

Alex Yao from JPMorgan Chase & Co. asked for an update on the progress of Baidu's AI-powered search upgrade, including any shifts in user behavior metrics and the company's long-term vision for the product.

Answer

EVP Rong Luo explained that Baidu is aggressively replacing traditional links with multimodal AI answers, leading to higher user engagement and retention. He outlined the long-term vision as evolving from information delivery to task completion and personalization. Luo cautioned that near-term revenue will be pressured as monetization is not yet the primary focus.

Alex Yao of JPMorgan Chase & Co. questioned the rationale for accelerating the AI search transition, management's expectations for AI answer penetration, any updates on monetization testing in Q2, and the anticipated ramp-up of monetization and consumer behavior changes in the second half of the year.

Answer

Rong Luo, EVP of Baidu Mobile Ecosystem Group, explained the acceleration aims to enhance user experience in a rapidly evolving landscape, noting AI-generated content in search results grew from 22% in January to 35% in April. He highlighted improved user retention and query diversity. On monetization, Luo stated they are in the very early stages of testing a rebuilt approach, which has significant potential for monetizing long-tail queries. He acknowledged this investment would create near-term margin pressure but is crucial for long-term growth.

Alex Yao of JPMorgan Chase & Co. questioned the rationale for accelerating the AI search transition, expectations for AI answer penetration, and the timeline for monetization testing and its ramp-up in the second half of the year.

Answer

EVP Rong Luo stated the acceleration is to enhance user experience amid evolving user behaviors, enabled by better model capabilities and lower costs. He reported that AI-generated content in mobile search results increased from 22% in January to 35% in April and is expected to rise further. While monetization is in early testing and will create near-term margin pressure, Luo sees significant long-term potential in monetizing long-tail queries and creating new, native ad formats that are less intrusive than traditional search ads.

Alex Yao questioned the core advertising growth outlook for Q1 and the full year 2025, the underlying macro assumptions, whether the ad business has bottomed out, and the potential timing and opportunities for monetizing generative AI in search.

Answer

EVP Rong Luo acknowledged a challenging macro environment for SMEs but expressed cautious optimism, stating a belief that the advertising business is reaching a bottom. He projected gradual improvement, with the first half of 2025 outperforming Q4 2024 and the second half showing further improvement. Monetization of AI-powered search will commence once the features are sufficiently refined.

Alex Yao of JPMorgan Chase & Co. inquired about the primary drivers for the rapid growth in ERNIE API calls, the emergence of any B2C killer applications, and the medium-to-long-term outlook for ERNIE's adoption.

Answer

Co-Founder and CEO Yanhong Li explained that ERNIE's growth is driven by improved model intelligence, lower inference costs, and a better toolchain for customization. Li identified Baidu Search as having the potential to be a killer app in the Gen AI era. He noted that while most API calls are from internal product renovations, external API costs grew approximately 20% quarter-over-quarter, demonstrating strong enterprise adoption.

Alex Yao from JPMorgan Chase & Co. asked about near-term consumer behavior and travel trends during the National Holiday and Mid-Autumn Festival, as well as Japan's revenue contribution and potential financial impact from geopolitical tensions with China.

Answer

CEO Jane Sun reported strong holiday trends characterized by "long stay, long distance, and long tail" travel, with domestic market showing healthy single-digit growth and cross-border travel being even stronger. She noted international capacity recovered to 88% of pre-COVID levels, outbound hotel and air bookings surged over 30% year-over-year, and inbound travel increased over 100% year-over-year during Golden Week. Regarding Japan, she stated no major impact has been observed so far, as travelers can choose alternative destinations.

Alex Yao inquired about near-term consumer behavior and travel trends during the National Day and Mid-Autumn Festival holidays, and the expected financial impact of geopolitical tensions on Japan's revenue contribution.

Answer

Jane Sun, Chief Executive Officer, reported strong holiday trends characterized by 'long stay, long distance, and long tail' travel, with outbound hotel and air bookings jumping over 30% year-over-year and inbound travel surging over 100%. She noted that while factors like safety, visa ease, and direct flights influence destination choice, the company has not seen a major impact on Japan's revenue so far.

Alex Yao of JPMorgan Chase & Co. inquired about Trip.com's AI and content strategy for the coming years, and requested more details on the recent upgrade to the Trip Planner feature.

Answer

Executive Chairman James Liang explained that AI and content create a powerful synergy, with AI personalizing travel recommendations and user-generated content enhancing the AI models. He highlighted that the upgraded Trip Planner uses large language models and millions of data points to generate highly personalized, editable itineraries from simple user prompts, reinforcing the company's goal to be the most efficient one-stop travel platform.

Alex Yao of JPMorgan Chase & Co. requested insights into consumer sentiment, particularly in the context of the dynamic macroeconomic environment and geopolitical tensions.

Answer

CEO Jane Sun described travel demand as resilient across markets. She noted that while destination preferences shift, overall demand continues to grow. Sun stated that leisure travel per capita spending was comparable to last year's levels, and business travel demand remains stable, with over 90% of corporate clients expecting their travel budgets to grow or remain unchanged in 2025.

Alex Yao of JPMorgan Chase & Co. asked for an outlook on leisure and business travel demand, the growth trajectory for 2025, and the primary drivers supporting revenue growth.

Answer

CEO Jane Sun highlighted the resilience of travel demand post-COVID. She identified key growth drivers: strong demand from young travelers for 'event+travel,' the 'silver generation' of retirees with high purchasing power, the easing of visa restrictions for outbound travel, and the recovery of international flight capacity. She also noted strong growth in Asian markets outside of China, which are a key investment focus.

Alex Yao from JPMorgan Chase & Co. asked for a detailed performance breakdown of the Trip.com brand in Q2 by market and product line, as well as an update on its margin trend.

Answer

CFO Xiaofan Wang detailed that the Trip.com brand achieved robust revenue growth of approximately 70% in Q2, contributing about 10.5% to the group's total revenue. The APAC region drove this growth, accounting for over 70% of Trip.com's revenue. She added that the brand will continue to be in an investment phase to prioritize growth opportunities in the international market.

Alex Yao of JPMorgan Chase & Co. asked about the addressable market size for the Trip.com platform in Asia and the competitive landscape it faces in the region.

Answer

CEO Jane Sun estimated that the total travel market in Asia, excluding China, is approximately 1.5 times the size of the China market, representing a significant opportunity. She outlined Trip.com's competitive advantages as its convenient one-stop shopping platform, excellent mobile user experience honed in China, superior 24/7 customer service, and strong negotiating power for deals derived from its large outbound business.

Alex Yao of JPMorgan Chase & Co. followed up on the fan economy, asking about the biggest opportunities and challenges over the next one to two years.

Answer

Management's moderator explained that the biggest opportunity is leveraging offline events and merchandise to deepen the bond with the online platform, ultimately driving subscriber growth for their comprehensive service platform. A key challenge is ensuring the platform's development can support a fully integrated approach for content and privileges. The G-Dragon concert was cited as a successful example of this strategy and international expansion.

Alex Yao of JPMorgan Chase & Co. followed up on the fan economy, asking about the biggest opportunities and challenges TME foresees over the next one to two years as it expands in this area.

Answer

Management identified the biggest opportunity as building a comprehensive service platform that uses offline events to deepen the bond with the online platform, ultimately growing the subscriber base. They also highlighted international expansion, citing the G-Dragon concert tour as an example. The primary challenge mentioned was ensuring the platform's development can effectively support an integrated strategy for both content and user privileges.

Alex Yao of JPMorgan Chase & Co. asked about TME's monetization strategy for non-paying users, particularly as the company shifts away from deep discounts, and inquired about updates on advertising and other initiatives.

Answer

An executive explained that while converting free users to paid subscribers is the priority, TME monetizes its non-paying user base through several methods. These include incentive-based advertising, a new 'online earning' model, and direct-to-fan commerce such as digital album sales and artist merchandise.

Alex Yao of JPMorgan Chase & Co. asked about the surprising sequential revenue growth in the social entertainment segment, which broke a long-term declining trend, and whether this was due to WeSing stabilizing or year-end seasonality.

Answer

CEO Liang Zhu clarified that the growth was driven by more than just seasonality. A key factor was a new, highly successful interactive 'collection' feature on Kugou streaming. He also confirmed that the WeSing business is stabilizing with healthy VIP growth. While he expects the overall segment to be stable in 2025, he cautioned it could still face a slight downward trend, which TME aims to offset with further innovation.