Alibaba Group - Q4 2024
May 14, 2024
Transcript
Operator (participant)
Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's March Quarter 2024 and Full Fiscal Year 2024 Results Conference Call. At this time, all participants are on listen-only mode. After management's prepared remarks, there will be a Q&A session. I would now like to turn the call over to Rob Lin, Head of Investor Relations of Alibaba Group. Please go ahead.
Rob Lin (Head of Investor Relations)
Thank you. Good day, everyone. Welcome to Alibaba Group's March quarter and full fiscal year 2024 results conference call. With us are Joe Tsai, Chairman, Eddie Wu, Chief Executive Officer, Toby Xu, Chief Financial Officer. We have also invited Jiang Fan, Co-Chairman and CEO of Alibaba International Digital Commerce Group, to join the call. This call is also being webcasted from the IR section of our corporate website. A replay of this call will be available on our website later today. Now, let me quickly cover the safe harbor. Today's discussion may contain forward-looking statements, including without limitation statements about our new organization and governance structure, Alibaba's plan to convert to primary listing in Hong Kong, Alibaba's strategies and business plans, as well as our belief, expectations, and guidance about our business prospects, such as the future growth of our business, revenue, and return on investment and share repurchases.
Forward-looking statements involve inherent risks and uncertainty that may cause actual results to differ materially from our current expectations. For detailed discussion of these risks and uncertainties, please refer to the latest annual report on the Form 20-F and other documents filed at U.S. SEC, or announced on the website of Hong Kong Stock Exchange. Any forward-looking statements that we make on this call are based on assumption as of today, and we do not undertake any obligation to update these statements except as required under applicable law. Please note that certain financial measures that we use on this call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP diluted earnings per share, or ADS, and free cash flow, are expressed on a non-GAAP basis.
Our GAAP results and reconciliation of GAAP to non-GAAP measures can be found on the earnings call, earnings press release. Unless otherwise stated, growth rates of all metrics stated during the call refer to year-over-year growth versus same quarter last year. With that, I will turn over to Eddie.
Eddie Wu (CEO)
那个大家好。
Speaker 15
Hello everyone. Following several quarters of adjustments and continued user experience enhancement, our core business has gradually returned to healthy growth. The Taobao Tmall Group achieved double-digit year-over-year growth in GMV this quarter, Alibaba International Digital Commerce revenue increased by 45%, our core public cloud offerings recorded double-digit year-over-year growth in revenue, AI-related revenue increased triple-digit year-over-year. This quarter's results demonstrate that our strategies are working and we are returning to growth. TTG continued to execute its user-first strategy by creating a system for brands, merchants, and industrial belts to operate efficiently and to meet the diverse needs of China's domestic consumers through a shopping experience that offers quality products at attractive prices supported by exemplary service. Our investments in driving price competitiveness and elevating the user experience have received positive consumer feedback.
We've seen tangible results in progress, strong growth in quarterly buyers and purchase frequency that has driven robust double-digit growth in GMV, reflecting a continued improvement in consumption and user trust. At the same time, we continue to enhance member benefits and service experience with 88VIP membership numbers growing by double digits year-over-year to surpass 35 million. Last quarter, I shared TTG's three key investment areas aimed at enhancing overall capabilities. First, product supply. Second, competitive pricing. And third, quality service. We are committed to boosting consumption and purchase frequency through these measures, driving further growth. For fiscal year 2025, we expect TTG's GMV will gradually return to healthy growth as our platform's overall shopping experience continues to improve. At the same time, our schedule of launching monetization products will also proceed as planned.
In the second half of the fiscal year, we will gradually introduce new monetization mechanisms aligned with new platform algorithms and product features that will further enhance CMR-centered revenue growth. As we continue to improve platform products and investment tactics under our user-first strategy, we're very confident we will win more consumer trust and maintain our market share leadership. This quarter, we completed adjustments to Alibaba Cloud's product strategy for the AI era, and the quality of our revenue continued to improve. We focused on creating competitive advantages in Alibaba Cloud's technology and scale and reduced pricing for public cloud products globally. Driven by strong demand from various sectors, including foundational model companies, internet companies, as well as customers from industries such as financial services and automotive, AI-related revenue accelerated and continued to record triple-digit growth year-over-year.
We believe that this wave of generative AI-driven technological innovation is in the early stages of the industry cycle. Starting in 2024, we've seen a rapid increase in customer demand for AI. It has also stimulated growth and demand for traditional cloud computing needs, including general computing storage and big data. Therefore, we are actively investing in our cloud computing product matrix, especially in AI infrastructure, to capture the monumental opportunities. Currently, Alibaba Cloud has established strategic partnerships with the vast majority of leading foundational model companies in China. At the same time, Alibaba's proprietary foundational model, Tongyi, released a 110 billion parameter model in late April, which is on par with the top open-source models globally. Looking ahead, we will deeply integrate our Tongyi large model with Alibaba Cloud's advanced AI infrastructure to realize synergies and optimization across software and hardware.
We aim to create the premier AI development platform that combines outstanding AI capabilities and high-cost efficiency, redefining the industry benchmark for cost performance. Based on our leading product portfolio, substantial infrastructure investments, and proactive industry partner strategy, we are confident that Alibaba Cloud's revenue, excluding internal customers, will return to double-digit growth in the second half of the 2025 fiscal year. For our overseas e-commerce, AIDC revenue grew 45% and order volume grew 20% year-over-year this quarter due to continued focus on expanding cross-border retail operations and enhancing the consumer experience. Jiang Fan will share more details with you later. In March this year, we withdrew Cainiao's IPO application. Cainiao provides essential infrastructure to Alibaba's core e-commerce business, and we hope Cainiao will strengthen its synergies with our Chinese domestic and international e-commerce operations. Alibaba Group will continue to support the expansion of Cainiao's global logistics network.
The past year has been a year of self-transformation for Alibaba. We're pleased that adjustments in our business and organization have yielded results. A journey of transformation will undoubtedly have challenges, but we are well prepared. In the new fiscal year, Alibaba Group will continue to focus on investing and executing our user-first AI-driven strategy, and we are confident in the long-term healthy development of our company. Thank you.
Jiang Fan (Co-Chairman and CEO of Alibaba International Digital Commerce Group)
Greetings. This is Jiang Fan, and it's a pleasure to be back to give you an update on AIDC's business. AIDC continued to achieve rapid growth this quarter despite widespread and intense market competition in different countries. Across AIDC, total orders were up by 20% year-on-year, with especially significant growth in our cross-border business. Next, let me share with you on the progress we've made around the three major drivers that are our consistent focus.
First, business model and supply chain service upgrade. Driven by AE Choice, AliExpress continued to realize robust order growth. AE continued to advance in its transition from the original platform business model to a supply chain efficiency-driven platform POP, semi-consignment plus full consignment hybrid business model. While maintaining rich merchandise assortment, we significantly enhanced user experience. By April 2024, AE Choice orders accounted for around 70% of total orders on AliExpress. At the same time, synergies between AliExpress and the cross-border logistics capabilities of Cainiao have further strengthened AE's competitiveness, with the 5-day and 10-day delivery completion rates both doubling year-over-year. And we'll continue to make effective investments while paying attention to improving the efficiency of the choice model. Second is product and technology innovation. We continue to bring more localized, high-quality user experiences to different consumers around the world.
AI and intelligent technologies continue to enhance efficiency and user experience in cross-platform smart product assortment, optimized presentation of product details, multilanguage search, targeted recommendations, and so on. Additionally, more and more small and medium enterprises are starting to leverage AI to enhance their operating efficiency. 17,000 SMEs have subscribed to the AI Business Helper launched on Alibaba.com, and millions of products have now been launched with AI, and searches for AI-optimized products have increased by 37%. Third is sustained growth in key markets. Our continued investment in key markets for AliExpress has brought about growth in our user base, as well as enhanced user experience supporting our sustained rapid growth and continued leading position locally. Trendyol is actively investing in cross-border business, achieving very rapid growth in the Gulf region. Trendyol's brand recognition has improved rapidly, driven by significant expansion in its merchandise supply.
It has become one of the most downloaded e-commerce apps in the region. There remains huge potential for AIDC to grow user penetration in the majority of its markets. We will achieve quality growth by providing better and more differentiated merchandise and services. At the same time, we'll focus on enhancing operating efficiency both by narrowing losses in certain businesses and by making higher efficiency investments to continue to grow actively in markets around the world. Thank you.
Toby Xu (CFO)
Thank you, Jiang Fan. First, I will provide a recap of the key financial highlights for fiscal year 2024. Following the overview, I will provide a detailed review of the financials for the March quarter. During this fiscal year 2024, our total consolidated revenue was RMB 941.2 billion, an increase of 8%. Consolidated adjusted EBITDA increased by 12% to RMB 165 billion. Non-GAAP net income increased 11% to RMB 157.5 billion, while non-GAAP diluted earnings per ADS saw a fast increase of 14%, strengthened by our ongoing share repurchase program. ExcludingSun Art, Freshippo, and Intime businesses that have physical retail operations, group revenue would have grown at approximately 11%, and our group consolidated adjusted EBITDA margin would have been approximately 3.6 percentage points higher at approximately 21%.
During the fiscal year 2024, under the leadership of the Capital Management Committee in our board of directors, we have increased cash return to the shareholders. We repurchased a total of about 1.25 billion ordinary shares or equivalent to 156 million ADS for a total consideration of $12.5 billion. After accounting for ESOP issuance, our outstanding shares decreased by 5.1% in fiscal year 2024. Regarding cash dividend, we declared an annual cash dividend of $1 per ADS, totaling about $2.5 billion for fiscal year 2023, which was paid out in January 2024.
Furthermore, our board of directors has approved an annual cash dividend for fiscal year 2024 of $1 per ADS, and a one-time extraordinary cash dividend is a distribution of proceeds from disposition of certain financial investments in the amount of $0.66 per ADS, with total cash dividend amounting to approximately $4 billion. Through a combination of share repurchase and cash dividends, we have returned and plan to return about $16.5 billion to shareholders for fiscal year 2024, up from $13.4 billion for fiscal year 2023. We are committed to returning value to our shareholders, and we'll continue to execute our capital return programs. Now, let me provide a review of our financial performance for the March 2024 quarter. Overall, we observed improving fundamentals across our major businesses, supported by enhanced investments aimed at fueling growth.
During the quarter, our total consolidated revenue was RMB 221.9 billion, an increase of 7%. Consolidated adjusted EBITDA decreased by 5% to RMB 24 billion. Our non-GAAP net income was RMB 24.4 billion, a decrease of 11%. However, the decline in our non-GAAP diluted earnings per ADS was more moderate at 5%, given our ongoing share repurchase program. Our net income was RMB 0.9 billion, a decrease of RMB 21.1 billion. This decline was primarily due to mark-to-market changes of RMB 19.9 billion from our equity investments in publicly traded companies, which shifted from a gain in previous year to a loss this year. As of March 31st, 2024, we continue to maintain a strong net cash position of RMB 446.5 billion or $61.8 billion. Free cash flow this quarter was RMB 15.4 billion, a decrease of RMB 16.9 billion compared to the same quarter last year.
The decrease mainly reflected the increase of RMB 7.7 billion in capital expenditure, the majority of which reflected our investments in Alibaba Cloud infrastructure, as well as a special dividend of RMB 10.5 billion from Ant Group in the same quarter last year. Now, let's look at cost trends as percentage of revenue excluding SBC during this quarter. Cost-of-revenue ratio increased by one percentage point to 67%. Product development expenses ratio remained stable at 5%. Sales and marketing expenses ratio increased by one percentage point to 13%. G&A expenses ratio decreased by one percentage point to 4%. Now, let's look at the segment results, starting with Taobao and Tmall Group. Revenue from Taobao and Tmall Group was RMB 93.2 billion, an increase of 4%.
During the quarter, our online GMV achieved a double-digit growth, which is driven by rapid order growth supported by a strong increase in number of purchases and the purchase frequency. Strong GMV growth supported a 5% increase in customer management revenue, though overall take rate declined slightly. The overall take rate was impacted by a combination of two factors. Firstly, Taobao and Tmall GMV both increased strongly. The decrease in take rate was due to Taobao's GMV growth, outperforming that of Tmall. This trend continues to reflect increasing demand of price-competitive products offered on our platform. Second, take rate was also impacted by the introduction of new models that currently have low monetization rates. We believe our overall take rate has room to improve as the percentage of paying merchants among our SME merchants remains relatively low, and we have yet to roll out the new advertising tools.
As we gradually roll out the new advertising tools that would further enhance merchants' ROI, we see upside from potential increase in merchant adoption as well as higher incremental spending from paying merchants. Direct sales and others' revenue decreased 2% to RMB 24.7 billion. China Commerce wholesale business revenue increased 20% to RMB 5 billion, primarily due to an increase in revenue from value-added services provided to paying members. Taobao and Tmall Group Adjusted EBITDA was RMB 38.5 billion compared to RMB 39 billion in the same quarter last year, primarily due to the increase in investment in user experience, which resulted in improved customer retention and higher purchase frequency and technology infrastructure partly offset by the increase in revenue from customer management service. Revenue from Cloud Intelligence Group was RMB 25.6 billion during the quarter, an increase of 3%.
We are committed to our strategy of focusing on high-quality revenues from increasing public cloud adoption while reducing low-margin project-based contracts. During the quarter, our core public cloud offerings, which include products such as Elastic Compute, database, and AI products, recorded double-digit growth in revenue. During this quarter, AI-related revenue experienced accelerated growth and continued to record triple-digit growth. We expect the strong revenue growth in public cloud and AI-related products will offset the impact of the roll-off of project-based revenues. Alibaba Cloud's adjusted EBITDA increased by 45% to RMB 1.4 billion. The increase was primarily due to improving product mix through our focus on public cloud and operating efficiency. Alibaba International Digital Commerce Group revenue was RMB 27.4 billion, an increase of 45%. Revenue from international commerce retail business increased by 56% to RMB 22.3 billion.
The increase in revenue was primarily due to the solid combined order growth of AIDC's retail businesses, revenue contribution from AliExpress's Choice, as well as improvements in monetization. Revenue from our international commerce wholesale business increased by 11% to RMB 5.2 billion. The increase was primarily due to an increase in revenue generated by cross-border related value-added services. AIDC's adjusted EBITDA was a loss of RMB 4.1 billion compared to a loss of RMB 2.2 billion in the same quarter last year. Loss increased primarily because of increased investment of businesses, including AliExpress Choice and Trendyol's cross-border business, partly offset by improvements in monetization. Total revenue for Cainiao grew 30% to RMB 24.6 billion, primarily contributed by the increase in revenue from cross-border fulfillment services.
Cainiao Adjusted EBITDA was a loss of RMB 1.3 billion compared to a loss of RMB 319 million in the same quarter last year, primarily due to additional retention incentives granted to Cainiao employees recognized during the quarter in connection with the withdrawal of its IPO. Local Services Group revenue in March quarter grew 19% to RMB 14.6 billion, primarily due to the order growth of Ele.me Amap. Local Services Group Adjusted EBITDA was a loss of RMB 3.2 billion this quarter compared to a loss of RMB 4.1 billion in the same quarter last year, primarily due to the continued narrowing of loss from our to-home business driven by Ele.me's improved unit economics and increasing business scale. Revenue from our DME Group was RMB 4.9 billion, a decrease of 1%.
Adjusted EBITDA was a loss of RMB 884 million compared to a loss of RMB 1.1 billion in the same quarter last year. Loss reduced primarily due to the reduced loss of Youku. Revenue from all other segments decreased 3% to RMB 51.5 billion, mainly due to the decrease in revenue from Sun Art and Alibaba Health, partly offset by the increase in revenue from Freshippo. The decrease in revenue from Sun Art was mainly driven by the scale-down of supply chain business and decrease in bucket size. Adjusted EBITDA from all other segments was a loss of RMB 2.8 billion compared to a loss of RMB 1.9 billion in the same quarter last year, primarily due to the increased losses from Freshippo and the decrease in profitability of Lingxi Games.
Lastly, we have been preparing for our primary listing in Hong Kong and currently expect to complete this by the end of August 2024. We will make a further announcement on the primary conversion date in due course. In closing, our robust balance sheet positions us well to strategically reinvest our cash flows to foster growth and strengthen leadership in core businesses, thereby improving future returns on invested capital. As Eddie and Jiang Fan mentioned, we anticipated that near-term investment will yield improved firstly, improved user experience in our domestic e-commerce platform that supports strong GMV growth in FY 2025 and enhance the monetization in the second half of FY 2025. Secondly, a return to double-digit revenue growth in the second half of fiscal year 2025 for Alibaba Cloud business. And thirdly, continuous rapid growth momentum while improving unit economics from AIDC.
We are seeing positive initial results, making us even more confident in achieving strong and sustainable growth in our core businesses. Thank you. And that's the end of our prepared remarks. We can open up for Q&A.
Rob Lin (Head of Investor Relations)
Hi everyone. For today's call, you are welcome to ask questions in Chinese or English. A third-party translator will provide consecutive interpretation for the Q&A session. Please know that the translation is for convenience purposes only. In the case of any discrepancy, our management statement in the original language will prevail. If you are unable to hear the Chinese translation, bilingual transcript of this call will be available on our website within one week after the meeting.
Speaker 15
大家好，今天的电话会议欢迎您用中文或英文提问。我们会有第三方工作人员提供实时的交替翻译。翻译的目的是方便大家理解。如有任何疑义，请以我们管理层原始语言所做的程序为准。如您无法听到中文翻译，本次电话会议的双语记录将会在会议结束后的一周内在我们的网站上提供。
Rob Lin (Head of Investor Relations)
Operator, please connect the speakers and SI conference lines now and start the Q&A session when ready. Thank you.
Operator (participant)
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. To give more people the opportunity to ask questions, please keep yourself to no more than one question at a time. Your first question comes from Kenneth Fong with UBS. Please go ahead.
Kenneth Fong (Analyst)
Hi, good evening, management. Thanks for taking my question. I have a question regarding the CMR versus the GMV growth. Our strategy for focusing on user experience and price competitiveness have yielded solid results, delivering a double-digit GMV growth despite the intense competition. As Toby earlier highlighted, because of the makeshift and early in monetization, we see CMR underperforming GMV at only 5% growth. With our new app product, site-wide marketing, 全站推广, to be launched, how should we think about the pace for this gap to narrow over time? And then down to EBITDA for the incremental growth in the CMR, should we expect this to reinvest back to the business, or we should actually expect a margin gradual expansion as the CMR growth gradually reaccelerates? Thank you.
Speaker 15
管医生晚上好，感谢。这是我的提问。我的问题是关于CMR和GMV两者的增长关系。这是公司专注于完善用户体验和价格力，带来了扎实的实效。虽然面对激烈的竞争，但是也实现了两位数的GMV增长。刚才Toby在发言中也是讲到了。那么由于Toby所讲的原因，我们看到CMR表现依然还是低于GMV的增长只有5%。但是接下来我们准备推出全站收费的机制。那么推出以后，我们应该如何理解这两者的一个差额？是不是说以后CMR提高以后，增幅的部分会再投资于这个业务的发展，还是说这是公司的EBITDA会进而提高？
Toby Xu (CFO)
Kenneth, thanks for the question. I think I will just start providing my explanation, and then Eddie can add. I think as you can see, in this quarter, the GMV had a double-digit growth. As I said, actually, this growth is both quite strongly in Taobao and Tmall merchants. The first thing is, I think the execution of our strategy, we have seen the result. Basically, we are backing growth. That's a very important message. Secondly, as we were saying, we are introducing or enhancing our monetization product, and we'll be introducing the new gradually roll out the monetization product, which will help enhance the ROI and eventually enhance the penetration into the merchants, particularly the SME merchants, as well as increase their spending in the monetization product. However, it would take some time since we are rolling out gradually.
We will be able to see the growth throughout the year, particularly in the second half of the year, that you will see the sort of the result coming out during the second quarter of the year.
Speaker 15
好，感谢。我是Toby。我先来解释一下，后面可能Eddie会想要补充。那么大家也看到本季的话，GMV是取得了两位数的增长。那么在淘宝、天猫商家中间的增长尤其是明显的。因此，我们可以看到我们公司实施的战略在见效。那么这是第一个部分。第二个部分的话，对，我们这是会逐步来推出这些商业化的产品。那么这样可以提高投资回报率，也可以提高我们在商家中的渗透率，尤其是中小企业，他们在变现产品方面的开支会逐步提高。但是这个可能会需要一定的时间来到位的。我们会是逐步来推出这些产品。那么相信在下半年的时间里面，你们可以看到效果。
Jiang Fan (Co-Chairman and CEO of Alibaba International Digital Commerce Group)
Okay. Before Eddie add on, give you more color on this sort of roll out of the monetization product, I would just also explain on the investment we are making. For Taobao and Tmall, as we're saying, we see the early success of executing our strategy by investing in the customer experience, various things, focusing on consumer first. So we see the result, and we are willing to invest. So that's the firstly. Secondly is, in terms of investment we are making, on the other hand, we are doing it in a very disciplined way. We do closely monitor the ROI. For the investment we can make, definitely we will see the good ROI from it. So it's in a very disciplined way. So we will continue to make the investment.
In terms of how much we are going to invest, really depending on the pace, we're ramping up the consumer experience as well as the supplies. So we have the resource, and we are committed to make the investments.
Speaker 15
好。一会儿我会交给Eddie进一步的介绍我们这些商业化产品的进度的一个时间表。在那之前，我先补充说明一下我们的投资。就是在桃天集团，我们投资于改善消费者体验这一方面的投资已经是取得了初步的成效。我们因为看到成效，所以我们进一步愿意去做这方面的投资。那么第二点，我们做的任何的投资一定会有很高的纪律性。我们做的任何的投资，我们一定是要看到有投资回报。所以我们会继续本着这样的方式继续来做这样的投资。那么投资多少，这个要看我们就是提高客户体验和产品丰富度的一个速度来进一步的部署。
Eddie Wu (CEO)
好。谢谢。我再补充一下关于其实大家关心的全站推的进展和我们的计划。总体来说，对于实现更多的中小广告主更简单地去投放，以获得他的生意增长，全站推是我们现在一个比较重要的产品。那总体现在我们正处于在一个合适、一个小规模客户内的一个测试阶段。那我们在这个测试阶段的目的是更多的是在因为我们知道全站推的核心的需求是要在保证客户投放的ROI的要求下去获得生意的增长。所以我们在调整我们的算法模型，以及在用更长的时间在训练我们的模型，以及在更多的客户投放的数据基础上去提升我们的整体给客户的ROI的一个保证的一个效率。所以这个时间我们觉得还是会需要一定的时间，但是这个是一个确定性可以实现的一个过程。然后我们在正式推出全站推之后，我们可能也是觉得需要一定的时间去增加客户，以及增加客户在不同行业里面，不同的行业，以及在不同的用户人群当中的流量的匹配。所以在这个我觉得我们在正式推出之后，总体会逐步看到收入的在全站推收入的增长。但是那个阶段我们估计也是在12个月左右。也就是说总体的全站推的客户从测试期到正式期，正式期之后如果我们再开始做全量，我们需要很多的很长时间的算法的调整，以及客户和流量的匹配，以及客户的渗透率的提升。对。但我想再强调一下，在这个过程当中其实是一个确定性的一个过程。只是说运转这个商业模式和这个产品的算法模型，我们确实需要这样比较长的一个时间。对。
Speaker 15
Thank you. Yes. So moving ahead with omni-platform marketing and whole-platform charging is an important direction that we're moving in as we're making it easier for SMEs to advertise. Of course, it's important to ensure that money that merchants are spending on advertising achieves solid ROI. So to that extent, we're currently adjusting and tweaking the algorithms, training the models, doing testing, and using the data from the testing to further improve the service and enhance ROI. So all of this will, of course, take some time, but it is certain that we are moving in that direction and will eventually get there and further optimize it for different customers and for different sectors as a means of enhancing our revenue.
I expect that this process will take something like 12 months because it does take time to tweak the algorithms, get those data in place, and ensure everything is optimal. What I can tell you is that's certainly the direction that we're moving in, and we continue to fine-tune. Okay. Next question.
Operator (participant)
Thank you. Your next question comes from Gary Yu with Morgan Stanley. Please go ahead.
Gary Yu (Equity Analyst)
Hi. Thank you, management, for the opportunity. My question is regarding the Alibaba Cloud business. It's encouraged to hear from management that we're expected to resume double-digit growth in the second half of the year. Could management please share some of the composition of the revenue growth driver behind? How much of the improvement in growth is coming from AI-related products? How much is it coming from public cloud, and how much is it coming from low-margin private cloud projects becoming a smaller part of the business? And then also related to that is, once we are back up to the double-digit growth level, how should we look at the kind of medium-term margin for cloud business going forward? Thank you.
Speaker 15
好。感谢管医生。我的问题是关于云业务这一方面的。那么刚才听到在下半年的时间可以恢复到两位数的增长，我们感到这是非常鼓舞人心的一个消息。那么想要知道到时候云业务的一个收入构成大概会怎么样，就是多少比例是来自于AI相关的产品，多少会是来自于公共云，多少会是来自于私有云方面的业务。当然这个业务份额是逐渐在减少的。然后的话，在恢复到两位数增长之后，云业务的一个利润率，长期的中长期的利润率大概会是多少？
Eddie Wu (CEO)
好。谢谢。我来回答一下这个问题。就是从我们现在的收入增长来看，就是我们现在的总体的云的业务的收入增长主要来自于AI的新产品的驱动。所以在这个阶段，我们会其实我们会看到我们很多的新的增量来自于我们的AI相关的产品。但是因为AI相关的产品的投入，同时还会带来客户在公共云，在阿里云上其他的传统的云计算的产品。所以我们觉得这两部分都会互相促进。同时另外一部分怎么看待专有云的专有云里面一部分项目制的收入的减少？我们觉得这部分应该说在公共云上面的这种业务的双位数的增长，其实实际上这个季度已经产生了。只不过我们这个季度的增长还在抵消一些我们现在在降低一些项目制Base的收入产生的影响。实际上我们会期待于在未来的几个季度，我们在公共云和AI相关的收入带来的更大的增长，同时能够去抵消我们已经在减少的这些我们的低毛利的这些项目制收入。同时这些低毛利的项目制收入，我们觉得通过从去年到大概也就是在一到两个季度之内，基本上对我们的影响，业务的影响就会消失。未来基本上我们的主要的增长都来自于我们一些比较有长期的业务价值以及高毛利的像我们的公共云的产品以及AI相关的产品，这些收入带来的这些增长.
Speaker 15
Thank you. This is Eddie, and I'll take that. If you look at the overall revenue growth of the cloud business today, most of that is already being driven, I would say, by AI and AI-related new products. So going forward, a lot of the incremental growth we can expect to see in the cloud business will be related to investment that customers are making in AI. But also there's a complementary effect because the more that customers invest in and make use of AI, the more demand they will also have for other of our various cloud offerings. So the two things go hand in hand. At the same time, we continue to decrease the share of project-based revenue in cloud's overall revenues.
In fact, the other parts of the cloud business already achieved double-digit growth in this quarter, but that continues to be offset by the ongoing, although diminishing, but still ongoing impact of that low-margin project-based business. But as we continue to phase out that low-margin project-based business, we expect revenues to grow faster, primarily driven again by public cloud and by AI-enabled offerings. And we expect that we should see that complete disappearance of that drag within, say, one or two quarters into the new year.
Eddie Wu (CEO)
好。我再补充一下关于您提到的关于我们未来如果恢复到以公共云的产品为主要的增长因素带来的两位数的增长之后，我们在云业务上的一个中长期利润率这个问题。我们觉得在这个现在首先我们在我们的公共云产品上，大部分产品都是保持一个比较合理健康的一个利润率。但是在AI相关的这些产品上，我们觉得这个是一个十年大周期的十年大的一个IT周期的非常早期阶段。我们会保持一个比较健康的一个利润率。但是可能在AI的早期阶段，我们会持续地做更长期的投入。但是总体来说，公共云的所有产品大概率都是一个比较会是有一个比较健康的利润率的这样的产品。
Speaker 15
On the second part of your question, which had to do with the kinds of profit margins we expect to achieve in the medium to long term, once we get to that place where public cloud primarily is driving our growth and we're back to double-digit growth, I would say that for the most part, our public cloud offerings have very healthy profit margins. When it comes to AI, of course, we're looking at a 10-year IT new technology cycle. We're in the very early stage of that cycle. So we're talking about healthy margins, but with ongoing longer-term investment. But overall, the profit margins from the AI products will be healthy.
Rob Lin (Head of Investor Relations)
Next question, please.
Operator (participant)
Thank you. Your next question comes from Alex Yao with JPMorgan. Please go ahead.
Alex Yao (Senior Equity Analyst)
Good evening, management team, and thank you for taking my question. So for the domestic e-commerce business, it's great to see the GMV growth rate has recovered back to double-digit in this quarter. Can you help us to understand what is driving the GMV growth rates to narrow the pace versus the e-commerce market? Or put it in another way, what did you do in the past quarter that leads to a slowdown of market share loss? And a broader question is, what does it take to be competitive in the current China e-commerce market given the rise of alternative e-commerce competitors in the market? Thank you.
Speaker 15
好。感谢管医生接受我的提问。我的问题是关于国内电商这一块。我们很高兴地看到本季度国内电商的GMV增速是回到了两位数的水平。那么我想知道背后是什么样的驱动因素在驱动着GMV增速的一个提高或者说可以缩小与其他电商平台增速之间的差距？或者说换一个方式来问，就是过去这个季度我们做了什么样的事情来让市场份额的丧失可以减慢？然后在新的电商环境中，我们需要做什么才能更好地与新型的其他平台来竞争？
Eddie Wu (CEO)
好。这个问题我来回答一下吧。就是总体来说，我觉得我们最核心的还是在提升总体的用户的电商的购物体验。那电商的购物体验无外乎基本上就是好商品、好价格和好服务。但是具体到更细的层面，其实我们觉得在中国的商品供给上有不同的模式。我们要用不同的产品去对应不同的模式来提高产品的价格力以及整个商品的转化效率。那刚才我已经提到了，就是我们其实大概上来说，我们如果分为品牌商、渠道商和产业代工厂的话，或者白牌市场的话，基本上这三种供给我们都要用不同的产品形态或者不同的经营模式去提升这三个不同的供给里面的商品的价格力以及商品的转化效率。同时我们投资于客户体验，包括我们的物流，包括我们的客服，最终能够带来我们觉得通过这样的针对不同的供给，用不同的产品组合去提升产品的效率，去提升服务体验，最终应该能够带来总体的客户在我们这边的购买频次的提升以及更多的客户回来，或者说更多的新客户因为我们的商品力，因为我们的服务回到淘宝来产生购买。
Speaker 15
Thank you. Well, overall, I think it's really about enhancing the user's shopping experience. And as I've said, that really consists of getting three things right. First is having good merchandise. Secondly, having that at a good price. And thirdly, supporting that with excellent service. Now, if we break that down further when it comes to goods, the assortment of goods, there are actually different models that we can apply with different products to better support them. So basically, we can think about goods from brands, goods from channel merchants, and goods from industry belts or manufacturers of white-label goods. And we can provide different products and take differentiated approaches to ensure that those three different kinds of players are getting their goods to consumers in a way that is cost-competitive. They're offering a good price and achieve high conversion efficiency for their merchandise.
All of that can be further supported with strong logistics and good customer service. So we can take a different approach with respect to those three different kinds of supply, always with the aim of increasing customer purchase frequency and attracting new customers as well to achieve that advantage.
Eddie Wu (CEO)
好。我再补充一下吧。就是说对于现在中国的电商市场竞争，其实大家都非常激烈，这个大家也看到了。但是对于淘宝来说，我们有一些独特的我们在这里面的战略路径的选择。因为我们觉得在于电商，一个货架电商这个市场上来说，我们除了要提升我们的产品效率，所谓产品效率就是商品对于消费者的转化率背后是更多的价格力以及整身的产品的好商品的一个服务。但另外一方面，我们觉得在于对于整个marketplace的一个丰富性来说，对于淘宝也是非常重要的一个支撑。所谓万能的淘宝对于我们来说是现在中国电商市场的竞争对手当中我们一个非常独特价值。所以我们是要在保持整个淘宝市场的丰富性的基础上，再对一些核心的动销率高的一些产品我们提供更高的商品效率。通过这两个维度的持续的提升来建立我们在中国电子商务市场的一个独特的竞争优势。
Speaker 15
Secondly, I can add to that that as we know, there's been very intense competition in China's domestic e-commerce market. We've made some very clear strategic choices on Taobao as to how to address this competition and win going forward. A big part of this is ensuring high product efficiency, referring to conversion, and also to providing optimized services as well. Of course, another important part of the very important part of the equation for Taobao is what I've referred to as omnipotent Taobao or universal Taobao. Taobao has everything that anybody could want, the richest possible assortment. So while maintaining that rich and diversified assortment, also focusing on achieving better efficiency with respect to high-volume selling goods to maintain that unique competitive advantage.
Rob Lin (Head of Investor Relations)
Next question.
Operator (participant)
Thank you. Your next question comes from Ellie Jiang with Macquarie. Please go ahead.
Ellie Jiang (Senior Research Analyst)
喂，感谢管理层接受我的提问。我有一个跟进问题是关于我们刚刚提到的全站推以及一些新的营销工具。就是想请教一下，现在因为市面上也看到一些友商推出了一些相似的产品，那对于咱们来说，我们如何去评价自己和友商的一个产品差异化，以及说在设计这一类产品以及说后续的推进的一个过程中，管理层认为像这一类商品的一个转化效率的一些决定因素是什么呢？就是后面可能是一些流量，包括像管理层刚刚提到的产品丰富度，就可能请管理层分享一下这个背后的一个逻辑。谢谢。
Speaker 15
Thank you. I have a follow-up question about the whole platform charges and the new marketing tools that you've mentioned that will be launched. We understand that there are some similar products that have been launched or are being launched on the market by competitors. I'm wondering how we would evaluate our products versus the competitors, how differentiated are our products, and what are some of the factors that determine conversion rates for these kinds of products, if you could share some of the underlying logic. Thank you.
Eddie Wu (CEO)
我想澄清一下你的问题，具体是指问营销类产品和其他平台的差异性，是这个意思吗？
Speaker 15
Just to clarify the question, are you asking about our marketing products and how they are differentiated versus other platforms? Is that the question?
Ellie Jiang (Senior Research Analyst)
对，主要可能聚焦在全站推这一个产品上。谢谢。
Speaker 15
Basically focusing on the Omni-platform Marketing solutions, 全站推.
Eddie Wu (CEO)
我觉得每个平台的变现或者商业化产品都有它的特殊性，因为都是要针对这个平台特殊的流量机制以及这个平台的经营机制和这个平台的人群构成去做设计的。所以这里面我觉得可比性并不那么强，但是最终商家比拼的最终比拼的是一个在这个平台的投资的ROI。所以我觉得在用户的设计的流程或者说算法模型可能都不太有可比较性，但是商家基本上会通过一个投资的ROI来决定选择把钱投放在那边。对，但就我们现在而言，我们淘宝的整体的商家的投放ROI还是整体的大部分电商平台当中我们是最高的一类。对。
Speaker 15
Right. Understood. I think different platforms are going to be very different if you look at the way they achieve monetization and their monetization products, because the platforms are fundamentally different in terms of their traffic, the business model, and the different groups of users on the platform. So I don't think there's any direct comparability. I think certainly what merchants are looking at at the end of the day is the ROI that they achieve on their investments in marketing. So I don't think we can directly compare user design and algorithms and things of that nature, but you can certainly look at the ROI on marketing investment. And I can tell you that on Taobao today, merchants are achieving probably the highest ROI they can get on any platform for their marketing investments.
Rob Lin (Head of Investor Relations)
Next question.
Speaker 15
Thank you. Your next question comes from Alicia Yap with Citigroup. Please go ahead.
Alicia Yap (Equity Research Analyst)
Hi. Good evening, management. Thanks for taking my questions. Congrats on the solid quarter. I have a follow-up on the overall CMR growth. Obviously, the 5% growth is very good, and the double-digit GMV growth is good. Any obstacle that we foresee that could prevent GMV and CMR to further improve from here? Just wondering, how is the overall consumer consumption trend? It seems that we are gaining momentum that allows us to enjoy faster growth despite potentially more muted macro outlook. Any color you can share with us with the latest trend that you're seeing for April and May on the GMV growth would be helpful. Thank you.
Speaker 15
感谢管理层接受我的提问，也祝贺公司取得非常扎实的季度业绩。我想后续提问关于CMR，当我们看到5%的增长，这非常好；看到GMV有两位数的增长，这也非常好。那么想要了解的是最新的消费趋势如何，似乎公司现在有一定的发展势头。就是尽管有这样的一个外部环境，我们还是可以继续来提高GMV和CMR。那么想要知道，比如说4月、5月最新的趋势如何，就CMV和GMV而言。
Toby Xu (CFO)
Alicia, thanks for the question. I'll take on this question. I think as we explained, we see the results from our investments, the GMV growth. And then I think that the growth trend is sustainable, what we can observe. So we're still observing a good, healthy growth in April, May time. And in terms of CMR, as we were explaining, because they see GMV growth because of the mix shift in the GMV towards Taobao merchants and also some of their new sort of models and business products, which has relatively low monetization at this stage. So there's a big headroom for it to increase the monetization rate. And with the introduction or rollout of our monetization product, we will be seeing the growth of CMR catch up with GMV sort of gradually. So it will lag behind a few quarters, but it will eventually catch up. So that's sort of our belief in terms of the effect of the investment, effectiveness of the investments, and also both on the GMV side as well as on the revenue side. Yeah.
Speaker 15
好，感谢你的提问。我是Toby。我来这样解释，就是说我们看到我们所做的投资现在在产生成效。那么具体就是看到GMV在增长在提高。我们认为当前的增长的趋势它是可持续的，而且你问到4月、5月，我们也是看到很好的、很健康的这样一个发展的势头在延续。那么部分原因就是我们之前说到的结构的转移，就是向更多的淘宝的商家，还有更多的新的商业化的产品。那么这些产品目前可能是变现率比较低的。因此的话，在未来我们还是有很大的空间可以进一步的提高我们这个商业化的一个水平。所以我们认为接下来几个季度我们会去逐步推出这些商业化的产品。那么到时候CMR的增长它会逐步迎头赶上，与GMV来持平。之后的情况可能会继续延续几个季度，但是最终会迎头赶上，持平。就两者是相当的。所以到时候我们认为不光是GMV，还包括公司的这些其他的收入都会有所增加。
Rob Lin (Head of Investor Relations)
Next question. Sorry.
Joe Tsai (Chairman)
Rob, Alicia, this is Joe Tsai. I'd also like to sort of supplement what Eddie and Toby said. I think implicit in your question is you're looking at our March quarter GMV growth in double digits. And compared to last year, it was an easy comp because last year was partially coming out of the lockdown from the COVID lockdown. And so the implicit question is, are we going to see from a macro standpoint, what do we see from our platform that could reflect sort of broader consumption trends? What I would like to say is, as we look at the Chinese consumers, the number one, right now, household cash is at its highest point. We're looking at something like $19 trillion of household cash savings that's in the system. So the Chinese consumer has the ability to spend, right?
I think all we're looking at is, what's their confidence level of spending on a going forward basis? First of all, I think we've all seen some of the growth in the services sector during the May 1st holidays. Within our platform, we've seen some green shoots, some discretionary items like apparels and electronics are actually growing, looking pretty good, the growth is pretty good. What that tells us is consumers are starting to reflect that willingness to spend. We have no doubt that they have the ability, but the willingness reflects the confidence in what they have about the future. We're seeing some positive signals, but it is probably still too early to tell because the macro environment is still broadly affected by the property sector downturn. On that front, we've been very encouraged that the local governments now have been relaxing the property purchase restrictions. So we're going to wait and see. But so far, confidence level, we've seen some early signs of growth.
Speaker 15
[Foreign language] is increasing, but still need time to further observe.
Eddie Wu (CEO)
[Foreign language] 好，我这个再补充一下，就是因为我觉得前面几个问题都有类似，就是我刚才在和 Joe 还在开玩笑说，各位投资人朋友比我们好像更急着赚钱。对，所以我觉得在这个上面我想说得更清楚一点，就是说，而且我们觉得在淘宝这样的平台，用我们投资于商品的竞争力、商品的效率以及客户服务体验的，以及用户的消费体验的提升带来的 GMV 的增长，以及用户在我们这边消费的频次增长，是我们今年的首要任务。在这个只有这个首要任务获得一个更好的一个增长的情况下，后面如何去提升 GMV，如何去提升 CMR 是一个水到渠成的过程。而且我想可能这里面也再说一下，就是说我们知道淘宝从零开始到现在，我们占了我们主要收入的阿里妈妈平台，其实也是我是最早期参与的参与领导建设的这个平台。所以我经历了淘宝从零的收入到1亿到10亿到100亿收入的这个整个阿里妈妈广告平台的变现过程。所以在这个后面如何一步一步稳健地去通过我们的广告产品的去提升，来提升我们的 CMR，我觉得这是一个确定性的一个过程。只不过我们现在反而是在控制这个过程，让商家的体验更好，让消费者的体验更好。对我们今年来说，首要的任务还是在我们的消费者的体验提升，以及消费者的体验提升带来的 GMV 的增长。所以这里面我想再补充一下我的这个看法。
Speaker 15
Yeah, this is Eddie. I'd just like to chip in to be even clearer on this point because I detect a common pattern across the past several questions. And I was just actually joking with Joe about this because it seems like investors are even more anxious than we are to make money. So I'd like to be really clear about what our primary objective is this year. And that is on Taobao certainly to invest in merchandise assortment and competitiveness and an enhanced user experience to drive GMV growth as well as purchase frequency, right? That's our number one objective this year. And only after being able to achieve that objective successfully can we really increase CMR. And in fact, increasing CMR will just be a natural result of those efforts.
Talking about advertising and commercialization, I was personally part of the whole growth story of Taobao from zero in revenues and the development of Alibaba from zero through RMB 100 million to RMB 1 billion and RMB 10 billion and beyond. So I can tell you that we have the capabilities to put in place those kinds of advertising products that will drive CMR growth. We're certain that we can do that, but we're controlling the pace at which we move forward to ensure a really good experience for our merchants and for our consumers. So this year, we're really focused on enhancing consumer experience and growing GMV, and we'll move forward on that basis.
Rob Lin (Head of Investor Relations)
Thank you. Next question.
Operator (participant)
Thank you. Your next question comes from Ronald Keung with Goldman Sachs. Please go ahead.
Ronald Keung (Managing Director)
Thank you. Thank you, Joe, Eddie, Toby, and Ron. So I guess no one asked about the AIDC so far. I haven't really deeply discussed. So I want to ask about the because this quarter, it was mostly the increase in AIDC losses to the group earnings. Otherwise, the Taobao team has been relatively stable. So I want to hear how do we see the investment scale evolve for international e-commerce? We've also seen some of our peers shifting from fully entrusted to semi-entrusted, which is they kind of leave merchants to do their local warehousing. How do we see our loss or investment evolve with these trends? Thank you.
Speaker 15
好，我来提一个关于 AIDC 的问题，之前都没有问到过 AIDC 这一块。那么这一季度应该说我们看到 AIDC 的这个亏损还是在扩大，这个淘宝天猫这个应该是比较稳定。那么想要知道 AIDC 现在这个投资的一个规模怎么样？然后另外我们也了解现在是全托管，就是转向这个半托管的模式，就是由商家自己负责自己的这个仓储的服务。这个就是能不能介绍一下？
Eddie Wu (CEO)
[Foreign language] 好的。我首先回答一下上个关于上个季度的亏损的问题，因为上个季度我觉得主要是有两个原因会导致我们的这个业务投入比较大。那第一个原因就是上个季度我们在一些新兴市场还是有一个比较激进的一个投入的，尤其是在中东，因为上个季度 3 月份也是中东的这样的一个穆斯林的一个 Ramadan 的一个大的一个销售的节点。对，那我们的这个像 Trendyol 的这样的一个新开始在海湾地区拓展业务，那会有一个比较大规模的投入。对，这是一方面。那第二就是刚才我们也讲到了，就是 AE Choice 的这个商业模式现在的占比一直在爬升。那这个商业模式的在这个切换过程中，它本身的这个盈利能力还需要一个时间的一个追赶。那它跟我们过去的这样平台模式的这样的一个盈利，那它是有这么一个 gap 在里面。那我们现在也在快速地去优化我们的效率，然后我们也可以看到在接下来的这样的几个季度里面，我们也会看到我们整个这个 AE Choice 整个优异的一个快速的一个优化。对，所以我认为随着我们这样的一个新的模式的逐渐的稳定，那我们也会去有更大的一个更多的关注这个商业模式的一个效率。那当然就是说在追求增长的同时，我们会关注这样的一个效率。
Speaker 15
Thank you. Well, I think there are really two principal reasons for the losses in this quarter or for the heightened spending in this quarter. First was that in certain emerging markets, and especially in the Middle East, this was a time of year that represents peak sales with Ramadan in Middle Eastern countries. So Trendyol was taking advantage of that with advertising spending promotions reaching out to consumers. And then the second reason has to do with AE Choice, as AE Choice occupies an increasing proportion of overall orders of the overall business. And as we're switching over to this new business model, it's going to take a little time for the profit margins in AE Choice to catch up. So there is a margin gap there to be filled. We are working rapidly to optimize efficiency of the AE Choice model.
I think you'll see within several quarters very clear enhancement in the unit economics of the AE Choice model. As the new model stabilizes, we'll continue to pay attention, of course, to achieving growth, but balancing that also with more efficiency.
Eddie Wu (CEO)
[Foreign language] 关于您的第二个问题，就是关于这个半托管、全托管、半托管的问题。我想你们的问题更多应该是一个跨境的一个模式跟一个未来，就是本地商家把货备到本地的这么一个模式之间的这样的一个差异。对，那我想说的是，有些品类它可能更适合这样的跨境销售，因为它的产品特性、品类特性，那它可能更适合这样的一个跨境的模式。那有些品类可能更适合一个本地发货的模式。那这里面就是我们也看到，其实商家在过去也有把很多的这样的一个商品备货到海外。对，那其实不同的平台都在去尝试去获得一些本地的商家。那我们也在做，我们在比如说中东，包括可能像韩国、欧洲的一些市场，我们也在积极地拓展本地的卖家。对，那么我们相信有一些品类可能本地商家他提供的服务是更有竞争力的。对，那有一些品类可能是跨境的模式更有竞争力。那我们还是从消费者的体验跟消费者需求角度看，包括从我们整个的经营效率的角度看，在不同的品类，在不同的市场去选择是一个以本地为主的还是一个以跨境为主的一个商业模式。
Speaker 15
Ron, your second question, which had to do with semi-consignment versus full consignment model. So that's not really about cross-border per se. It's about where merchants pre-place their merchandise in a local warehouse for local shipping. Our take on that is that some categories are just better suited to a cross-border business model because of characteristics of the merchandise and other reasons. For other categories, that kind of local shipment model can work better. So we've done a lot of this in the past as well, pre-placing merchandise into overseas warehouses to be shipped locally. And we're working on developing more local sellers in places like the Middle East, South Korea, and Europe. But we think at the end of the day, for some categories, local merchants can be more competitive, but in other categories, the cross-border model will work better. It really comes down to competitiveness and consumer preference. We continue to track how consumers receive these different approaches and plan accordingly.
Rob Lin (Head of Investor Relations)
Thank you. Next question.
Operator (participant)
Thank you. Your next question comes from Yang Bai with CICC. Please go ahead.
Yang Bai (Research Analyst)
[Foreign language] 嗨，感谢欢迎。我的问题是这样的，就是我们看到公司有非常慷慨的股东回报的策略，在我们测算下来股息率也接近8%。然而我也有一些担心，就一方面就是说目前的回购计划似乎也与公司当下的估值较低有一定的关联。第二就是它看起来好像是一个需要每年去宣布以及未来随时可以去调整的计划。但与此同时，其实我们看到海外一些科技巨头在满足了公司正常的战略发展之后，似乎无论公司的估值处在怎样的水平上，都能够用持续比较大的这种力度去回报股东。所以我的问题是如何站在一个更长期的这种角度上去理解我们的股东回报的策略。谢谢。
Speaker 15
Thank you. My question has to do with the company's plans to deliver returns to shareholders, and we see those plans now resulting in something like the equivalent of an 8% dividend yield. But I have some concerns about the share repurchase plan going forward because it seems to be related to the currently rather low stock price. But in the longer term, how will this play out and how can you guarantee your ability to continue to make those kinds of returns to shareholders?
Eddie Wu (CEO)
[Foreign language] 好的，谢谢杨白。我来回答这个问题。我想首先我们这个股东回报计划，如果你去看我们过去几年的回购的话，我们不是在最近的一两年开始做，我们已经做了很多年。而且我们目前的计划也是在之前董事会批准的情况下，一直要到2027年的3月份。目前如果你去看过去两年的数字，二三财年我们差不多做了130多亿美金的股东回报，到了2014年我们做了165亿美金的股东回报。在目前账上，我们未来可以用于做股票回购的金额，我们还有近300亿吧，290几亿美金我们可以继续用。所以从股东回报的计划的角度来讲，这不只是一个十分短期的一个计划，这个已经是一个长期的计划，而且已经在被一直在执行，也会继续执行。
Speaker 15
Well, thank you for that question. Our shareholder return plan isn't something that we just started to implement over the past one to two years. It's a long-term plan. It started several years back, and the current plan we have in place has been approved by the board to run all the way through to March of 2027. If you look at the amount of share repurchases that we did in the last year, it was around $13 billion. The more recent year, approximately $16.5 billion. And that leaves us with around $30 billion to continue to deploy. This is a long-term plan that we're committed to.
Eddie Wu (CEO)
[Foreign language] 当然我觉得你说的也很对，就是从我作为管理层在看未来的股东回报的这样一个计划跟安排的同时，我们肯定要看未来我们自己的一个整个现金流。同时我们也要考虑我们在我们自己的最核心业务里面投入的需要，加上在一些新的领域，比如说最近像我们在AI，在我们的AIDC的一个跨境的投入方面，所有都会需要考虑。那在这个基础上，当我们有资源，我们同样会愿意做我们的股东回报。当然我们在做股东回报的时候，我们是把回购跟股利作为一个统一来看一个股东回报的两种方法，我们都把它看成是一个股东回报。
Speaker 15
For us as management of the company, thinking about how we'll continue to deliver those returns to shareholders in the future, we have to look on the one hand at the company's cash flows, and on the other hand at the investment needs of the company related to our core business, but also in new emerging areas that are important like AI, for example, and also AIDC right now. But going forward, we will be committed to continue to make those kinds of returns to shareholders on that basis, and we take an integrated view. In other words, the share buyback program and dividend distributions together comprise our shareholder return program. We look at the two together.
Rob Lin (Head of Investor Relations)
Thank you. Next question.
Operator (participant)
Thank you. Your next question comes from Joyce Ju with Bank of America. Please go ahead.
Joyce Ju (Vice President and Senior Equity Analyst)
[Foreign language] 观众朋友晚上好。感谢接受我的提问。我的问题就是AIDC的，因为刚刚我们也有提到，就是说整体来说我们现在看到AE Choice的增长非常的快，已经占了我们AliExpress 70%的orders。就是想问一下，就是说从我们目前看到的增长跟未来几个季度或者甚至是一两年的话，我们这一块业务的长期的发展从地区角度，然后从品类角度能不能多给我们一点colors，然后有没有可能跟我们多分享一些类型的数据，比如说我们在哪些市场看到哪些品类哪一类的用户，我们看到最有希望是我们未来的长期的稳定的return users，或者说是我们看到哪里还有更多可以做的。包括集团也有提到菜鸟会在跨境电商这边做进一步的投入，能不能给一点具体的分享，大概哪一些类型的投入在哪一些国家，可能是我们会重点去发展和考虑的。谢谢。
Speaker 15
Thank you. My question is also about AIDC in particular. We understand that the AE Choice model now represents around 70% of total orders on AliExpress. Perhaps you could give us a little more color on how that model is growing, how you see it growing in the next couple of quarters or even in the next few years on a longer-term basis in terms of which regions, which categories, what kind of users represent the most stable sources of growth or where there's the most potential for further growth. I'm also wanting to understand more about your collaboration with Cainiao in terms of making further investments together on cross-border.
Eddie Wu (CEO)
[Foreign language] 对，我想讲一下，因为我们的目前的AE Choice的模式的主要的品类还是一些轻小件，就是这种品类更加适合做这样的一个跨境的运营。那么也可以看到这种跨境的运营是在这些品类上是有一些明显的优势的，那它比较适合通过这样的一个航空的这样的一个跨境物流的这么一个方式。对，那我觉得这个是我们在过去也是AE一直比较有优势的一些这样的一些品类。对，然后我们也在去拓展一些根据不同的这样的供应链的模式，也在拓展新的品类。那比如说我们可能在像韩国这样的市场，那我们也在尝试通过海运的方式可以去卖一些重大件的一些品类。对，那么也包括了一些本地仓卖家的探索。对，那我刚才也讲到过，其实我们作为一个平台，首先还是从我们优势的品类会做起，那我们也在构建面向更多品类的这样的一个供应链。对，那么另一点我觉得我们还有独特的一个差异性，就是说我们其实今天还有很多的本地的平台，就是包括东南亚的Lazada，包括中东跟土耳其的Trendyol，还有一些类似这样的平台。对，那我们现在整个的AE Choice也跟这些平台会做一个打通，那它的商品可以通过这样的一个平台直接向这些市场做销售。那在这样的一些市场，我们也不用重新去做一个很大的投入去建立我们的C端的品牌，那可以跟我们已经有的C端品牌结合。对，通过这样的方式，我们也可以快速的去向这些市场做一个商品类型的一个补充。那比如说在中东，我们跟Trendyol的合作就是有些品类像服饰一些品类，可能Trendyol从土耳其运过去它有一定的优势，那我们可以去补充它可能当前比较缺少的一些品类。那我们这个策略在不同市场都有尝试。对，所以我想说的是我们针对不同的市场，我们根据我们现有的资源以及这个市场的一个当前的情况，我们去考虑我们做哪些品类的这样的一个投入。
Speaker 15
Thank you. Well, AE Choice is a business model that is best suited, of course, for light and small packages, light and small goods. It has a strong advantage in that space, goods that can be air shipped cost-effectively. In the past, that is really where AliExpress has had an advantage in those kinds of categories. We are also working on growing different kinds of supply chain models for different markets. For example, for South Korea, working on developing additionally ocean freight for larger and heavier kinds of goods, and piloting also the deployment of local warehouses as well. Our general strategy in any market is to start with those categories where we have that advantage, the light and small packages, and then to build up supply chain to support other kinds of demands that make sense for that particular market.
Another important thing is that we have these local platforms in different regions, for example, Lazada in Southeast Asia, Trendyol in the Middle East. AE Choice is currently integrating with those different platforms to allow for direct sales into those markets, meaning that AE Choice doesn't need to make any big investments in branding and marketing to consumer offering in those markets. So that's allowing us to move ahead very rapidly into those different markets. Of course, different categories make better sense in different markets. In the case of Turkey, for example, they have an advantage when it comes to apparel, but we can achieve an advantage there in other categories where they don't have that kind of local supply.
In each market, of course, we look at our own resources, what we can bring, we look at the situation in that market, and then decide which categories we're going to bring to that market and how.
Rob Lin (Head of Investor Relations)
Thank you. Let's invite the last question.
Operator (participant)
Thank you. Your next question comes from James Lee with Mizuho. Please go ahead.
James Lee (Corporate Analyst)
Great. Thanks for taking my question. And so I'll take two questions about AI and cloud. And can you maybe talk about your development, your own large language model, and help us understand where your focus is? Is it scale? Is it easy scale to be a largest one based on the number of parameters, or are you focused on different modalities of data, voice, text, image, or video? And should we think about the end goal for your large language model to create maybe applications such as AI agents, shopping agents for your consumers, and business agents for your merchants? Thanks so much.
Speaker 15
I think it's okay. Yeah. 我这个问题还是关于人工智能和云这一块，就是想要知道你们主要追求的是规模，比如说参数的多少，还是说追求多模态的覆盖，就是语音、文字、视频等。然后你们这个发展，就是大模型最终的一个目标，是不是要创造一些AI的agents，就是助手，比如说可以帮你的消费者去做一个代购，或者是帮商家去做一个销售员这样。
Eddie Wu (CEO)
我想再澄清一下，你想问的第一个问题是关于我们大模型的发展方向，还是什么一个具体的问题？
Speaker 15
Can I just ask you please to clarify the thrust of your first question? Are you asking about the main objectives for our ongoing development of large models?
James Lee (Corporate Analyst)
Yes. Development of large language model, is it to scale, to have one of the largest one in China based on the more parameters? Is that the focus, or the modality of the data, voice, text, image as the focus? Because different companies that throughout internationally, they have different focus in terms of growing that large language model.
Speaker 15
对的。我问的是你们大模型开发，就是未来的重点或者是终极目标，你主要追求的是要有最多的参数，还是追求的是有最多模态的一个覆盖，包括语音、文字、视频等？
Eddie Wu (CEO)
我觉得是这样。现在所有做我们的，我们现在叫做综合的大模型的公司，绝大部分公司追求的方向基本上是一致的，也就是所谓的AGI，通用人工智能。但在走到这条目标的路径上，实际上我们每个公司都会有一些自己的方向选择。所以我觉得终极目标可能大家都是一致的，最终应该是在声音、文本、图像和视频，最终都会通过一个同一套体系融合在一起的一个终极的一个大模型。但是我们的，包括中国公司，包括美国公司在走的这条路上，有快有慢，有选择，有一些通过一些垂直方向的突破。所以说这个是我们在路径上有快有慢，整体的方向上应该都是一致的。最终我觉得所有的声音、文本、图像和视频都会融合在一个大模型里面，这是一个长期的一个发展方向。
Speaker 15
Right. Well, I think all of the companies in the large model space, anybody who's developing foundational models, shares the same goal, and that is working towards AGI, Artificial General Intelligence. But different companies will take different routes to get there, and along the way can make different choices and may choose to develop certain kinds of vertical applications, leveraging their model along the way. But at the end of the day, I think for all players, the ultimate goal is to achieve AGI covering everything from voice and audio through to image, video, and text, and encompassing all of that. So different pathways to getting there, perhaps different kinds of vertical models along the way, but the objective, I think, is a common objective.
Eddie Wu (CEO)
所以回到阿里巴巴，我们要投入这么大的资源去研究这AGI或者说开发大模型的方向，对我们来说其实有三个重要的目标。第一个目标本身就是对于AI大模型的这个研发方向，对于AGI的这样一个探索。第二个目标我觉得对阿里巴巴来说，其实也有一个非常重要的现实意义，就是我们的通义的大模型与我们的阿里云的商业模式是天然匹配的。也就是我们将会把我们的通义的大模型与阿里云的先进的AI技术设施进行软硬件协同的优化，来为中国的开发者或者中国的企业提供一个非常AI能力非常强、性价比非常高的AI的一个大模型推理服务。那我觉得在这个路径上是可能全球基本上也就是像阿里巴巴，我们是同时在做一个把云作为主要业务，同时把大模型作为主要业务的一个公司。我们觉得在这边有一个非常大的一个机会。然后第三点，我们才是通过我们的大模型的通义的发展，能够为阿里巴巴其他的业务的AI的发展提供一个基础模型的支撑。提供这个基础模型的支撑，能够让阿里巴巴的其他业务像丁丁、夸克、像淘宝能够拥有一个更好的一个AI的一个底层开发平台，能够创造帮助他们的应用去能够去切换到AI的这个方向。
Speaker 15
For Alibaba, I think there are really three major objectives underlying our ongoing large investments in research and development around AI and large models. The first is the pursuit of AGI, as I just explained, per se, developing our own foundational models for AI, moving towards AGI. The second objective is internally within Alibaba, integrating our cloud offering with Tongyi, our large language model, integrating them tightly so that we can provide to customers extremely well-integrated software and hardware offerings, bringing together our cloud capabilities and our AI capabilities, and enabling them to benefit from very highly effective and cost-efficient AI functionality. And I think if you look around the world, I don't think there's really any other company anywhere like Alibaba that has cloud as one of its major businesses and AI as one of its major businesses simultaneously. So we see that as a huge opportunity.
And then the third objective really is leveraging the development of Tongyi to enable other businesses within the Alibaba Group to better develop their own applications and their own business. So thinking of applications like DingDing, but also Quark, and even Taobao, they can benefit from leveraging our large model Tongyi to further improve their own applications.
Eddie Wu (CEO)
对。我再补充一个举个例子吧，就是关于第二点，就是说我们的通义大模型与阿里云的这个结合。我们通义的开源模型应该是现在中文世界最顶尖的开源模型，也是在中文世界使用开发者使用最广的开源模型。当开发者在他的开发过程当中使用我们的开源模型的时候，当把他的应用需要部署到线上的时候，他会非常自然地选用阿里云的服务，因为阿里云上通义的开源模型提供的性价比最好，对他来说最熟悉。所以这个是一个比较简单的例子，可以看到我们整个的通义模型与阿里云的生态以及阿里云的商业模式结合的一个关系.
Speaker 15
Just to further expand on that second point I just made about the tight integration between our Tongyi model and our cloud offerings, our open-source model that we've made available is undoubtedly the number one top open-source model anywhere in the Chinese-speaking world, and it's also certainly the most widely adopted. So when you have developers using our open-source model in their own development environment to develop something, when it comes time to deploy that, it's a very natural choice for them to choose Alibaba Cloud because of the very high level of cost efficiency, but also because that's the most familiar environment to them. So that's just a very simple example showing how we can leverage that tight integration between Tongyi, our model, and cloud, and indeed other aspects of Alibaba's business and business models.
Rob Lin (Head of Investor Relations)
Okay. That concludes our earnings call today, and thank you everyone for your participation. We look forward.
