Alibaba Group Q1 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 29, 2025

Key Takeaways

  • Positive Sentiment: Revenue in the Cloud Intelligence Group grew 26% year-over-year, driven by triple-digit growth in AI products for the eighth consecutive quarter and AI related customer revenue exceeding 20%.
  • Positive Sentiment: Alibaba China Ecommerce Group, formed by integrating Taobao, Tmall, Ele.me and Fliggy, saw 10% revenue growth and achieved 300 million QuickCommerce monthly active users in August, driving a 25% increase in Taobao app daily active users.
  • Positive Sentiment: Alibaba committed RMB 380 billion over three years for AI and cloud infrastructure plus RMB 50 billion in consumption investments, with RMB 38.6 billion CapEx deployed this quarter and over RMB 100 billion in the past four quarters.
  • Negative Sentiment: Adjusted EBITDA fell 14% year-over-year, primarily reflecting upfront investment in scaling QuickCommerce to capture new consumption patterns, partially offset by efficiency gains in AIDC and other units.
AI Generated. May Contain Errors.
Earnings Conference Call
Alibaba Group Q1 2026
00:00 / 00:00

There are 9 speakers on the call.

Speaker 7

Good day, ladies and gentlemen. Thank you for standing by. Welcome to Alibaba Group's June quarter 2025 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 Lydia Liu, Head of Investor Relations of Alibaba Group. Please go ahead.

Speaker 1

Good day, everyone. Welcome to Alibaba Group's June Quarter 2025 earnings conference call. With us today are Joe Tsai, Chairman; Eddie Wu, Chief Executive Officer; Toby Xu, Chief Financial Officer; and Jiang Fan, Chief Executive Officer of Alibaba E-Commerce Business Group. This call is also being webcast from the IR section of our corporate website. A replay of the call will be available on our website later today. Now, I will quickly cover the safe harbor. Today's discussions may contain forward-looking statements, particularly statements about our business and financial results that are subject to risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor statements that appear in our press release and investor presentation provided today. Please note that certain financial measures that we use on this call are expressed on a non-GAAP basis.

Speaker 1

Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. Now I will turn the call over to Eddie.

Speaker 8

晚上好, 各位投资人朋友。

Operator

Hello everybody, and welcome to this quarter's earnings call. This quarter, we delivered solid growth. Excluding revenue from Sonar and Intime, our total revenue on a like-for-like basis grew 10% year over year. Revenue growth of our core businesses remained strong. Customer management revenue from our China e-commerce business rose 10% year over year. Cloud Intelligence Group revenue growth accelerated to 26% year over year, with AI-related product revenue maintaining triple-digit growth for the eighth consecutive quarter. Revenue from AI DC grew by 19% year over year. In AI plus cloud, the accelerated development of AI applications and increasing AI product adoption by customers drove a 26% year-over-year revenue increase from external customers. During the quarter, AI-related revenue accounted for over 20% of revenue from external customers as AI demand continued to grow rapidly. We're also seeing AI applications driving great growth momentum of traditional products, including compute and storage.

Operator

SAP and Alibaba entered a strategic partnership focused on cloud and AI. As SAP's global cloud computing partner, Alibaba Cloud will support SAP customers to run and manage their core software systems on Alibaba's platform. Leveraging our QN3 models, SAP will also provide AI transformation services for its enterprise customers. This partnership signifies the recognition of our cloud infrastructure and AI capabilities by the global leading enterprises in the SAP ecosystem. We've continued to advance the capabilities of our AI foundation model. Since July, Alibaba has released upgraded QN3, including a non-thinking model, reasoning model, and AI coding model, which are recognized as global top performers in their respective categories. Notably, our QN3 coder model has rapidly increased QN's user adoption in overseas markets. We also open-sourced several models such as the video generation model WAN 2.2 and the text-to-image model QN Image.

Operator

By continuously upgrading our open-source models, we're empowering our customers to develop their own AI applications. Meanwhile, Alibaba's own AI-native applications continue to advance. AMAP has undertaken a comprehensive AI transformation with the launch of AMAP 2025, the world's first AI-native location-based application. The upgrade brings spatial intelligence into dynamic real-world scenarios, and AMAP is well positioned to become a new gateway for future lifestyle services. ThinkTalk has also completed its latest AI upgrade, creating the world's first agent-driven work feeds to explore next-generation workplace application paradigms. On our Taobao platform, we see immense AI-powered opportunities emerging, such as AI search and AI advertising platform. In consumption, we undertook a strategic combination of Taobao and Tmall Group, Ele.me, and Fliggy into Alibaba China E-Commerce Group. This organizational change creates a comprehensive consumption platform and upgrades our consumer experience.

Operator

We have consolidated supply chains, user bases, and membership benefits across our businesses and launched a tiered loyalty program that connects Ele.me, Fliggy, and AMAP. The newly integrated benefits enhance our members' experience across a full spectrum of consumption scenarios. Since May, our investments in quick commerce have rapidly surpassed key milestones and created synergies. In August, monthly active consumers on our quick commerce business are approaching 300 million, contributing to a 25% increase in monthly active consumers on the Taobao app. Daily order volume of our China e-commerce group continued to achieve new records. Looking ahead, Alibaba Group has two historic opportunities: to build a technology platform centered on AI plus cloud and to create a comprehensive shopping and daily life services consumption platform. We will invest at scale to capture the opportunities. This also marks a new entrepreneurial chapter for the company after 26 years.

Operator

In line with this, in February, we announced an investment of RMB 380 billion over the next three years to build our cloud and AI infrastructure. In July, we announced plans to invest RMB 50 billion in consumption. The transformative impact of AI on all industries, combined with the deep integration of AI and cloud, will present the most significant opportunity in the technology sector over the next decade. For Alibaba, we have the world's fourth largest and Asia's leading cloud infrastructure, along with full stack technology capabilities spanning AI computing power, AI cloud platforms, AI models, an open source ecosystem, and AI applications. This quarter, our CapEx investment in AI and cloud infrastructure reached RMB 38.6 billion. Over the past four quarters, we have cumulatively invested over RMB 100 billion in AI infrastructure and AI product R&D. Our investments in AI have begun to yield tangible results.

Operator

This is evidenced by Alibaba Cloud's return to rapid growth, driven by AI demand and our AI-enhanced experiences across consumer and enterprise-facing scenarios. We're seeing an increasingly clear path for AI to drive Alibaba Group's robust growth. We're also well positioned in China, the world's largest e-commerce market and the most promising service consumption market. China has a well-developed e-commerce infrastructure, high population density, and strong demand for service consumption, providing a solid foundation for the integration of our quick commerce business and the Taobao app. We believe this convergence will fulfill consumer needs for a one-stop consumption experience and meet merchants' desire to serve consumers across multiple scenarios. It will enhance commerce efficiency and pave the way for an all-in-one AI assistant for consumption. Alibaba Group's strategic positioning in quick commerce has ambitions beyond competing in a single category.

Operator

We aim to meet the one-stop consumption needs of our 1 billion consumers and shape business models of a comprehensive consumption platform in the AI era. In consumption, our long-term goal is to create a comprehensive consumption platform catering to our 1 billion consumers' full spectrum of shopping and daily life needs. We aim to offer the best experience to the largest consumer base with the highest purchase frequency, ultimately leading in an RMB 30 trillion addressable market. Over the next three years, Alibaba Group will embark on a new journey with an entrepreneurial mindset to drive robust business growth through sustained investments centered on the strategic areas of consumption and AI plus cloud. We're confident that these investments in the core business will sharpen our competitive edge and fuel long-term growth. Thank you.

Speaker 2

Thank you, Eddie. As Eddie said, we are embarking on a new chapter of entrepreneurship by investing in two strategic pillars of consumption in the AI plus cloud. These represent the two biggest long-term opportunities we are systematically pursuing. To reflect this sharpened focus, we have also adjusted our financial reporting accordingly. Starting from this quarter, we undertook a strategic combination of Taobao and Tmall Group, Ele.me, and Fliggy into Alibaba China E-Commerce Group, transforming our value proposition into a comprehensive consumption platform. This is not simply an organizational change; it's a major strategic investment aimed at redefining the consumer experience and unlocking long-term value across our ecosystem. This quarter marked meaningful progress on this front as we deepen investment in quick commerce, an increasingly essential use case for capturing new demand and shaping future consumer experience.

Speaker 2

Our quick commerce business achieved key milestones while contributing to the 25% year-over-year growth in the Taobao app monthly active consumers in the first three weeks of August. In tandem, we are building the AI plus cloud infrastructure to support the next wave of technological transformation, positioning Alibaba as a key enabler of enterprise AI adoption across industries. Our cloud business delivered accelerated growth as segment revenue and revenue from external customers both grew 26%, driven by surging AI demand and increased customer adoption of public cloud services to support AI workloads. At the same time, we remain focused on improving operating efficiency and profitability. In the quarter, AI DC delivered solid progress, approaching break-even while sustaining strong growth momentum. Now, let's look at the financial results on a consolidated basis. Total revenue was RMB 247.7 billion.

Speaker 2

Excluding revenue from SAP and Intime, revenue on a like-for-like basis would have grown by 10% year over year. The adjusted EBITDA decreased 14%, primarily due to our strategic focus on scaling quick commerce to capture new consumption patterns and drive future monetization opportunities, partly offset by margin improvements across several businesses, including AI DC and other units that made continued progress in operating efficiency. Our GAAP net income increased 76%, primarily due to the mark-to-market changes from our equity investments and the gain arising from the disposal of local consumer service business of Chengduo. Operating cash flow was RMB 20.7 billion. Free cash flow was an outflow of RMB 18.8 billion. This was mainly attributed to our accelerated pace on expanding AI plus cloud infrastructure as CapEx ramped up to approximately RMB 39 billion and the investment in Taobao Instant Commerce.

Speaker 2

Backed by nearly $50 billion in net cash, a healthy and low-leveraged balance sheet, and our strong access to capital markets, we have ample flexibility to support long-term strategic investments while maintaining financial resilience. This quarter, we bought back approximately 7 million ADS for a total of $815 million in our share repurchase program. We remain committed to shareholders' return through a mix of share buybacks, dividends, and investment for growth, and we will continue to adjust the pace and form of returns based on market conditions and strategic priorities. Now, let's look at the segment results, starting with Alibaba China E-Commerce Group. Revenue from Alibaba China E-Commerce Group was RMB 140.1 billion, an increase of 10%. Customer management revenue of our e-commerce business increased by 10%, primarily driven by the improvement of take rate.

Speaker 2

We had a successful June 18th shopping festival, which delivered strong consumer growth on the Taobao app. As we implemented user-friendly promotion mechanisms and increased the support for merchants that provide high-quality products and customer services, the number of 88 VIP members, our high-spending consumers group, continued to increase by double digits year over year, surpassing 53 million. Revenue from our quick commerce business increased 12%, mainly due to order growth as a result of rollout of Taobao Instant Commerce at the end of April. Since its launch, we have seen encouraging business progress, reflecting strong user adoption and growing order momentum. In the meantime, we have expanded our product offerings and front warehouse coverage for non-food categories as part of our efforts to improve user experience and enhance operating efficiency.

Speaker 2

We executed our plan to generate synergies between quick commerce and the rest of Alibaba's ecosystem by leveraging supply chains, users, and membership benefits across our businesses. In August, the Taobao app launched a tiered loyalty program that connects Alibaba Group's China e-commerce, quick commerce, and travel platforms. The adjusted EBITDA from Alibaba China E-Commerce Group decreased by 21%, excluding the investments in our quick commerce business. Our Alibaba China E-Commerce Group EBITDA has grown year over year. Revenue from AI DC grew 19%, primarily driven by strong performance in cross-border businesses. AI DC's adjusted EBITDA loss narrowed significantly, approaching break-even. As we continue to improve our operating efficiency, the U.E. of choice and the Chengduo's international business improved significantly on a sequential basis. Looking ahead, we are committed to enhancing operating and investment efficiency. As a result, our profitability will continue to improve.

Speaker 2

Cloud segment revenue grew by 26%, primarily driven by public cloud revenue growth. AI revenue continued its triple-digit growth. As AI demand continues to grow rapidly, we are also seeing increasing demand of compute, storage, and other public cloud services to support AI adoption. The adjusted EBITDA margin remained relatively stable year over year at 8.8%. We will continue to invest in customer growth and technological innovation, including AI products and services, to increase cloud adoption for AI and maintain our market leadership. As previously mentioned, we have updated our segment reporting to better reflect our focus. We simplified the financial reporting structure by reclassifying China, AMAP, and Hu Jin DME into all others. All other segment revenue decreased by 28%, primarily due to the disposal of Sonar and Intime.

Speaker 2

All others adjusted EBITDA was a loss of RMB 1.4 billion, primarily due to the increased investment in technology businesses, partly offset by the improved results of businesses, including Freshippo. The all other segment comprises a set of innovative initiatives, including several strategic AI-driven technology infrastructure and businesses. While we continue to drive efficiency improvements across business lines, we are also investing in AI opportunities to maintain our competitive edge and to drive future growth. In closing, this quarter marked meaningful progress in our strategic investment on two pillars that will power Alibaba Group's next phase of growth: our comprehensive consumption platform and AI plus cloud infrastructure. In commerce, the integration of multiple businesses under Alibaba China E-Commerce Group is driving stronger synergy across supply chains, user networks, and membership programs, enabling us to better serve evolving consumer needs and capture long-term growth potential.

Speaker 2

In cloud, revenue growth accelerated on the back of robust AI-driven demand. As we expand infrastructure capacity, we are helping more customers deploy and scale their AI workloads. We are investing with clarity and conviction on the two historical opportunities ahead: AI and domestic consumption. Our commitment of RMB 380 billion technology investment reflects our long-term ambition to build the infrastructure essential for AI proliferation, while our focused expansion in quick commerce is designed to unlock new demand and long-term consumption potential in China. With strong balance sheet, operating cash flow, and business momentum, we are well positioned to support these investments, drive sustainable growth, and strengthen core capabilities that will define Alibaba Group's future. Thank you. That's the end of our prepared remarks. We can open up for Q&A.

Speaker 1

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 note 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 transcripts of this call will be available on our website within one week after the end of the meeting. 大家好, 今天的电话会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传译。翻译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陈述为准。如无法听到中文翻译, 本次电话会议的双语记录将在会议结束后一周内在我们的网站上提供。 Operator, please start Q&A session. Thank you.

Speaker 7

Thank you. If you wish to ask a question, please press star then one on your phone and wait for your name to be announced. If you wish to cancel your request, please press star two. To give more people the opportunity to ask questions, please keep yourself to no more than one question at a time. Thank you. Your first question comes from Alicia Yap at Citigroup. Please go ahead.

Speaker 7

Hi, thank you. Good evening, management. Thanks for taking my questions. Congrats on your solid cloud revenue growth. I have a question related to your recent step-up investment in the quick commerce and also the food delivery business. Can management share with us what is your vision for the quick commerce growth opportunity in China and what is your investment plan for the quick commerce? How long will the heavy investment last and how will the investment bring the long-term value for overall Taobao and your China e-commerce platform? Can management share a bit of the latest progress of the Fan Gu, which is the quick commerce business? What other synergy you have realized so far and how should we expect the investment to impact our GMV and also the CMR growth in the coming quarters? Thank you.

Speaker 7

管理层晚上好，感谢接受我的提问。也祝贺你们取得的云收入方面很强劲的增长。我想提的问题是关于即时零售，淘宝闪购这方面最近投资加大。是不是可以请管理层分享一下对于在中国的这个即时零售增长机会，你们有什么愿景，对即时零售有什么某一计划？当前这种大额的投入会维持多久？这样的投资会不会带来长期的价值？迄今为止你们已经实现了什么样的协同效应？我们应该怎么去考虑这个投资对GMV的影响，接下来几个季度对GMV的影响以及对CMR增长的影响？谢谢。

Speaker 4

感谢你的问题。我首先回顾一下我们在闪购业务上的一些阶段性进展。同时我也会分享一下我们对闪购业务后面的一些预期。淘宝闪购上线四个月以来，首先我认为我们在用户、商户运营、物流建设、市场营销方面都取得了成功，特别是七月份开始，我们在订单规模、用户、商户供给、运力规模上都远超预期。只看外卖到家的订单份额，我们已经领先行业。我想跟大家分享几个具体的数字。第一，我们的日均订单分值达到1.2亿单，八月份我们的周日均订单也达到了八千万单。第二，从用户侧来看，闪购整体的月度交易用户买家达到了三亿，对比四月之前增长了200%。从商户供给来看，过去一段时间随着业务规模的快速增长，大量新用户、新商户加入淘宝闪购，尤其是优质供给达到了行业领先水平。在运力规模方面，淘宝闪购日均活跃骑手数已经达到两百万的规模，比四月份增长三倍。这也意味着我们创造了超过一百万个新的就业。在上个季度我也讲过，我们闪购第一阶段的目标首先是用户规模跟心智。经过过去几个月的发展，我们第一阶段的目标已经超预期实现。

Speaker 8

Thanks for your question. Let me begin by reviewing some of the progress we've made so far in our instant commerce business and then share our expectations for instant commerce going forward. Since we launched Taobao Instant Commerce four months ago, we believe that we've been highly successful in engaging users and merchants, building logistics capabilities, and marketing. From July onwards, in particular, the growth of order volume, user scale, merchant supply, and delivery capacity have all exceeded expectations. In fact, if you just look at the food delivery to home category, we are now already the market leader in terms of orders. Let me share some figures. First, our peak daily order volume reached 120 million, and weekly average daily orders reached 80 million in August. Second, user scale, quick commerce monthly active consumers, MAC, reached 300 million in August, representing 200% growth compared to before April.

Speaker 8

Third, merchant supply. The rapid growth in business scale has also attracted new merchants to join Taobao Instant Commerce. High-quality merchant supply in particular has reached industry-leading levels. Fourth, fulfillment capacity. Daily active riders have exceeded 2 million. That is a three times increase from April, and that also means that we've created over a million new jobs. As I stated last quarter, the first stage goals for our quick commerce business were to scale up user growth and build consumer mindshare. With these developments over the past few months, we have already achieved our first stage goals beyond our own expectations.

Speaker 4

接下来我再讲一下闪购对电商业务的拉动。首先从用户视角，淘宝闪购显著带动了手淘整体用户规模跟活跃度。闪购拉动淘宝八月第一季度增长20%。闪购作为一个更高频的场景，带动了那个手淘大盘活跃用户活跃天数的提升。在用户活跃提升的过程中，我们也看到，闪购带动电商收益的明显趋势，主要体现在，第一，因为流量上涨带来了广告跟CMR的提升。第二，因为用户活跃度提升以及新用户拉新跟流失用户的召回，我们可以减少市场费用的投入。我们认为这个趋势会在后续的持续经营中会扩大，相信中长期会更显著带动电商侧的收益。

Speaker 8

Next, let me talk about the synergies between quick commerce and our e-commerce business. First, quick commerce is a significant driver of overall user scale and engagement. In August, quick commerce drove 20% growth in the Taobao app's DAUs. The high frequency pattern of quick commerce has also contributed to a significant increase in average purchase days per user. With the increase in user engagement, we are seeing a clear trend of quick commerce driving incremental income for our e-commerce business. Specifically, first, the growth in traffic drives advertising and CMR growth. Second, as a result of heightened user engagement, incremental new user acquisition, and customer re-engagement, we can reduce sales and marketing expenses. We expect this trend to continue and to expand in our ongoing operations, and are confident that it will drive significant incremental income on the e-commerce side.

Speaker 4

接下来我想就大家特别关心的闪购的经营效率和优异方面分享我们的看法。首先关于经营效率，我认为不能抛开规模谈效率。那么过去我们的订单规模是同行的三分之一，在很多省市我们过去的份额甚至低于20%。在这样一个巨大的市场份额差距下，谈论效率没有意义。目前来看，闪购已经达到了规模领先，我们会快速提升我们的经营效率。同行在外卖行业做得非常优秀，尤其是效率方面，我们正在努力缩小这一差距。在效率方面，我们的提升空间是巨大的，分短期跟长期看，短期内我们的损益收敛主要来自于几个方面，包括第一，用户结构的优化。过去四个多月我们投入大量市场费，带来了大量的新用户，但新用户在获取阶段需要更高的投入。我们的新用户留存非常好，随着老客的比例快速提升，平台优异会随着用户结构而优化。第二，订单结构的优化，我们在下一阶段会持续推高推动高价值订单的比例，消费者的高价值的正餐订单以及零售订单的比例都在提升。随着平台整体AOV的提升，也会带来整体优异的优化。第三，履约效率跟成本的优化。前期我们订单激增，订单规模激增四倍的过程中，我们的首要任务是保证用户体验。因为短期运力不足，七八月份我们对运力做了额外的大规模投资。随着后续一旦平台的订单规模稳定之后，我们的物流成本会显著下降，带动平台优异进一步优化。

Speaker 8

Next, let me share my views on the operating efficiency and unit economics, UE, of quick commerce, because I know these are aspects to which you pay special attention. First, when talking about operating efficiency, you cannot disregard scale. In the past, our scale was just one third of our peers, and in many cities and provinces, our market share was even lower than 20%. With such a huge gap in market share, it's meaningless to talk about efficiency. Now, however, our quick commerce business is leading in scale, and we can quickly improve our operating efficiency. Our peers have achieved excellent performance in the food delivery industry, especially in terms of efficiency, and we are now actively working to narrow that gap. Our scope to improve efficiency is substantial. Let's look at it in the short term and then in the long term.

Speaker 8

In the short term, our losses will narrow, primarily driven by the following. Number one is optimization of customer mix. We have scaled up marketing expenses for user growth nationwide over the past four months and acquired a large number of new customers. New user acquisition requires substantial upfront investment, but we excel at user retention, and as the proportion of repeat customers increases, UE will improve. Number two is optimization of order mix. In the next stage, we aim to increase the proportion of high-value orders, including high-value meal orders, and increase the proportion of non-food category orders. UE will therefore improve as a result of higher average order value, AOV. The third is optimization of fulfillment efficiency and costs. In the initial phase, as order volume ramped up by four times, the number one priority for us as a platform was to ensure the user experience.

Speaker 8

In July and August, therefore, we made an additional large investment to address the severe short-term lack of delivery capacity. Going forward, as order scale stabilizes, our logistics costs will decline significantly, contributing to further UE improvement.

Speaker 4

commerce can generate positive economic returns for the platform as a whole.

Speaker 8

In the short term, we expect that while continuing to maintain investment in consumer benefit through logistics and subsidy efficiency improvements and order structure optimization, our UE losses can be reduced by half. In the long term, as order density increases, there is considerable scope to optimize our logistics costs compared to four months ago. In addition, there is also considerable scope to improve our targeted engagement of offline merchants. In my view, scale is the primary factor in achieving efficiency. With our newly achieved scale and market share, we are confident that we can achieve industry-leading efficiency in the long term. At the same time, we will not look at the standalone profitability of quick commerce delivery. If combined with the incremental benefits to our e-commerce business, we believe quick commerce will bring sustained positive economic value to the overall platform while maintaining price competitiveness.

Speaker 4

然后我再讲一下关于非餐饮零售品类的发展。首先我们把非餐饮的品类在即时零售业态分为两部分，第一部分是进场原生模式，另外一部分是远进场结合。进场原生模式下，一方面我们依托强大的商品供给跟供应链发展闪电仓模式。过去几个月闪电仓供给快速发展，我们的闪电仓已超过50,000家，订单同比增长超过360%。其中闪电仓25%的供给来自于阿里生态的供应链。第二是依托于盒马大力发展生鲜品类的前置仓履约能力，盒马在接入淘宝闪购后线上订单整体突破2,000,000，同比增长70%。在远进场结合方面，天猫超市将全面从B2C原厂模式升级为进场闪购模式。在保持原厂价格竞争力的同时，实现更快速的配送时效体验。

Speaker 8

Next, let me talk about development of the non-food category. In quick commerce, we divide non-food deliveries into two parts. One is the original hyperlocal quick commerce e-commerce model, and the other is e-commerce, a hybrid model of quick commerce plus e-commerce. On the hyperlocal side, we have leveraged our abundant supplies and strong supply chain to develop a lightning warehouse model. Over the past few months, supply in these warehouses has rapidly expanded. We now have over 50,000 lightning warehouses with order growth of over 360% year on year. 25% of the supply in these lightning warehouses comes from supply chains within the Alibaba ecosystem. Secondly, we have fulfillment capacity from front warehouses that have been developed by Freshippo for its fresh groceries category. Following Freshippo's supply connection into Taobao Instant Commerce, order volume has already exceeded 2 million, up by 70% year on year.

Speaker 8

In terms of the hybrid model, Tmall Supermarket is upgrading from a traditional B2C fulfillment model to a quick commerce model. This maintains its price competitiveness while achieving much faster shipping speeds.

Speaker 4

同时我们也会积极地引入天猫品牌线下门店加入淘宝闪购，实现天猫品牌线上线下一体化经营。我们预计未来会有百万家品牌线下门店注入淘宝闪购，天猫跟淘宝闪购的结合会给品牌商带来新的生意增长，也给消费者带来全新的购物体验。综合来看，我们预计在未来三年内，闪购跟即时零售为平台带来一万亿的新增成交。同时我们也相信外卖行业从一家独大到多平台参与，让商家跟消费者都有了更多的选择权，长期对行业一定是有利的。在这个过程中，平台真金白银的投入创造了超过百万的就业，推动行业变革的同时也促进消费和经济。谢谢。

Speaker 8

We are also actively onboarding Tmall brands' offline stores into Taobao Instant Commerce, enabling unified online/offline O2O operations for Tmall brands. We expect up to one million branded offline stores to join Taobao Instant Commerce over time. The integration of Tmall and Taobao Instant Commerce will open up new growth drivers for brands and offer consumers a new shopping experience. Overall, we expect Taobao Instant Commerce and quick commerce to add ¥1 trillion in annualized incremental GMV to the platform within the next three years. We also believe the food delivery market's shift from a single dominant player to multi-platform competition gives merchants and consumers more choice, which benefits the industry long term. Throughout this transition, we as a platform are committing real financial resources and investing to create over one million direct jobs, drive industry transformation, and stimulate consumption and the broader economy. Thank you.

Speaker 1

Next question, please.

Speaker 7

Thank you. Your next question comes from Thomas Zhang at Jefferies. Please go.

Speaker 7

Hi, good evening. Thanks, management, for taking my question and congratulations on a very solid last 12 weeks. My question is about Alibaba Cloud. We have seen cloud business is doing very well and accelerating to 26% year on year this quarter. My first question is, how should we think about these accelerations? Should we expect acceleration continues for coming quarters as well as our expectation for FY 2026? Because when I look into our acceleration and look into overseas peers, how should we think about the pace of monetization versus the U.S.? We also see our cloud margin reaching 8.8%. How should we think about the margin outlook into the future? On that front, given our acceleration is very impressive, can we talk about how different industry sectors actually perform in this quarter?

Speaker 7

I remember last quarter we talked about multiple sectors, including traditional sectors, also embraced the cloud opportunities. Are we actually seeing something different or making a lot more progress for this quarter? On that, CapEx, how should we think about our CapEx outlook given we have seen our CapEx is very nice during this quarter? Thank you.

Speaker 7

好, 感谢管理层接受我的问题, 也祝贺你们本季度取得的扎实的业绩。我想提的问题呢, 是关于阿里云这一方面。我们看到云业务现在表现很好, 那么本季度增速是达到同比的26%。那我第一个问题是想了解我们应该如何思考它的这种增速的加速。接下来几个季度, 或者说整个2026财年会不会继续保持这样的增速。考虑到这种增速并对比海外, 比如说我们跟美国相比, 我们应该如何思考呢? 我们的变现率的一个速度。另一方面, 我看到我们云的利润率现在是达到8.8%。未来的利润率的展望我们应该怎么去思考? 因为一方面我们的增速非常的快, 然后能不能谈一下本季度不同的行业它们的具体表现如何? 我记得上季度我们谈到了多个不同的行业, 包括传统的行业, 还有新兴的一些机会, 是不是某些行业本季度我们取得的进步较快? 另外关于CapEx, 我们应该有什么样的展望呢? 就是这些问题, 谢谢。

Speaker 4

好, 谢谢你的问题。这个问题总结起来还是蛮多的。我来先回答就是第一个问题吧, 关于我们的增速的预期。那从我们现在看到客户, 我们的阿里云的客户在使用AI产品, 或者说在他们的那个企业内部在开发AI产品的时候, 我们看到一些非常明确的一个趋势, 就是从这个趋势上看来, 我们觉得在需求端其实还是非常旺盛。那主要体现在两个方面, 我们看到非常多的企业, 他因为现在的AI的模型的能力越来越强, 所以他们在开发很多新的应用, 或者说创造很多新的user case。另一方面, 我们也看到了他现在很多的传统的一些应用的功能在快速的用大模型的能力去替代原来传统计算的, 用大模型的能力来替代原来传统CPU计算的这样一些功能。所以我们在看到这样的这个趋势面前, 我们看到客户的需求还是比较旺盛的。那另一方面, 我们也看到就是说我们一直看到在我们提到的这个训练和推理方面的这个需求的这个增长。我们在最近几个季度看到了, 除了在训练, 除了在推理方面的需求的快速增长之外, 我们看到在训练方面也有一些新的一些行业的观察。我们除了在行业当中一些基础大模型的公司还在持续的迭代升级它的升级训练它的模型之外, 我们也看到了很多的新的这些机会, 比如说像我们的车厂, 比如说像我们的教育类的企业, 或者说一些多媒体的应用类的公司, 他们现在都有一些训练, 他们用他们自己的专有数据去训练专有模型的这方面的一些需求。而这些需求对于AI, 对于我们的AI的整体基础设施的这个使用量其实会是一个比较好的一个推进作用。另一方面, 我们也看到就是在训练上面一些新的另外一个机会, 就是很多的企业在基于我们通义的开源模型之上, 其实也有非常强的一个后训练需求, 比如说我们刚才提到的这些教育公司, 或者说一些医疗和医疗行业相关的, 以及很多的做开发工具的这样的这些平台公司。其实我们发现这里有一些非常好的这些机会, 他们很多的这些他们的专属模型会用自己的数据和自己的场景去做我们在通义模型之上的后训练。在这个基础上, 他会天然的使用我们的阿里云的云计算平台, 同时我们会在这个基础上逐渐去开发一些针对我们开源模型的后训练的商业化服务。这也是我们开源模型的我们看到的一些新的商业化机会。我们预期在这样的一些再结合我们整个的看到推理需求的快速的增长, 我们预期在未来这几个季度阿里云的总体的增速还是会处于一个持续向上的一个过程当中。

Speaker 8

Okay, thank you very much for those questions. In noting them down, I saw there were quite a few questions, but let me start with the first one regarding the outlook for our growth rate. We certainly see a very clear trend among our customers in terms of utilizing AI products, and they're developing AI products, and this represents a very strong demand. First of all, as AI model capabilities continue to strengthen, more and more new AI applications are being developed and applied into more and more new use cases. At the same time, many vendors that had original use cases where they were running workloads on traditional CPUs are now beginning to leverage large models and using AI to run those original functions. For all these reasons, demand is very strong and continues to grow robustly.

Speaker 8

In recent quarters, we've seen fast growth in inference workloads as well as continued growth in training and in inferencing. Over the past few quarters, apart from that rapid growth in inferencing, we've also observed some new industry trends on the training side. Apart from the large fundamental models that continue to be upgraded in the market, there's also a lot of training that is taking place and creating new opportunities. For example, automobile vendors, companies in the education sector, or companies in the multimedia application space, they all have training requirements. They're leveraging their own proprietary data to train proprietary models to meet their demands. That, in turn, is driving higher utilization of our overall AI infrastructure. This is a very strong boost to infrastructure use.

Speaker 8

At the same time, we also see new opportunities around training, whereby companies are leveraging our open source models, and they have a lot of training demands in doing so. For example, we mentioned education companies as well as companies in the healthcare sector and companies that are creating development tools, platform companies. We see a lot of excellent opportunities with these proprietary models where they're leveraging their own data and their own to meet their own use cases by performing post-training or fine-tuning of our QN3 models. On that basis, they're making use of our Alibaba Cloud computing platform. At the same time, on that basis, we can also begin gradually to develop commercialized services, post-training services for our open source models.

Speaker 4

您说的一个对标海外市场的商业化节奏以及我们的毛利率，其实我觉得可以归结为是一个问题吧。那我觉得这个问题的回答来说，我其实还是从我们的一个判断说起，就是我们现在看到的一个我们自己对中国云计算市场的一个判断。我们觉得由于AI对于云计算这个市场的这个趋势的这个变革，我们觉得在市场集中度会比传统的云计算市场的集中度会有一个很大的提高，因为AI技术的这个出现导致于开发者在开发应用需要的技术站会多很多，从而会偏向选择具备全方位技术产品组合的厂商，尤其是在每一项单项产品上都具备领先能力的厂商。而Alibaba Cloud在传统的计算存储数据库、大数据库产品上，大数据产品上具备优势。同时我们在新的AI技术上，AI算力和AI infra，AI的模型能力具备全方位的领先优势，所以我们对开发者还具有更友好的开源生态。因此就现阶段来说，我们的目标是在中国市场获得超越平均市场增速的一个增速，用好AI时代的机遇，继续扩大Alibaba Cloud的市场份额。在这个战略目标情况下，我们现在的总体的优先级是还是更高的，是获取更多的用户，获取更多的用户的应用场景，而不是关注我们现在去提升毛利率。

Speaker 4

Your other question had to do with gross margin and benchmarking against what we see overseas. Perhaps I can share with you my judgment overall as to the Chinese cloud market. What I see as the trend is for there to be a higher level of market concentration in China as compared to what we see in overseas markets because developers here require full stack comprehensive capabilities for what they're developing. We have that full stack with complete capabilities across traditional cloud computing, compute storage, AI compute, or AI models. Of course, we have a very developer-friendly, open ecosystem as well. Our goal is to maintain a growth rate above the average rate of market growth to, at the same time, increase our market share.

Speaker 4

In terms of our strategic objectives, the priority is on growing the number of users, expanding into new use cases, and not in the short term on increasing gross margin.

Speaker 4

关于我们在AI方面的CapEx支出，我觉得我们还是会坚持原来三年投资¥3800亿这样的一个计划，但是每个季度可能根据供应链的不同，可能会有一些波动。同时呢，根据全球的AI芯片的供应和政策的变化，我们其实也有后备不同的和别的合作伙伴共同去做供应链的不同方式的一个储备。我们相信面对不同的一个行业情况，我们对于未来的¥3800亿的资本支出还是会按照预期的情况去完成。那¥3800亿的。

Speaker 4

Turning now to the question about our CapEx, capital expenditures on AI, we will continue to implement our three-year plan to invest ¥380 billion in cloud and AI. However, based on the supply chain situation in different quarters, there may be quarter-to-quarter fluctuation. At the same time, based on changes in policies around AI chips and supply, we have backup plans in place to work with various different partners and to be able to respond to different situations in respect of supply chains. I'm confident that no matter what changes may crop up in the industry, we will continue as planned and as expected to move forward with that planned CapEx investment of ¥380 billion.

Speaker 1

Next question, please.

Speaker 7

Thank you. Your next question comes from Kenneth Fong at UBS. Please go ahead.

Speaker 7

Hi, good evening management, and thanks for taking my question. Given the cross-selling that we have seen already achieved in our food delivery part, do we plan to ramp up the in-store part of local service, i.e., Taodianyu? Because we noticed that our Macau Bay in-store coupon has been stepping up promotion in certain regions. How should we think about any further investment or expand in this in-store part of business in the coming months on top of the food delivery? Thank you.

Speaker 7

好，观众网上好，感谢接受我的提问。那么鉴于我们在外卖板块所看到的就已经实现了的这种交叉销售的成果，我们会不会计划加大本地生活服务中的到店内容，到店消费的内容？我们也注意到饿了么、口碑这个消费券的促销计划在某些区域在加强，然后我们应该如何思考，就是到店业务接下来几个月的新的投资或者是新的扩张？谢谢。

Speaker 4

对, 我回答一下这个问题, 就是首先我想讲到就是刚才因为我们的闪购业务的这样的一个规模, 我们每天的这个闪购业务的频道的这个用户已经是非常大的一个规模了, 大概每天大概有1.5亿的这样的一个活跃用户。对, 那我们也看到我们这些用户他也有一些到店自提, 包括到店团购的这种需求。对, 所以我们会从满足用户需求的角度去看, 尤其是跟我们线下的这样的一个, 就是跟我们的到家业务的这样的一个协同, 我们也会去考虑去给用户提供更多样化的服务。对, 所以我们也在一些城市正在做一些测试跟探索。

Speaker 4

Yes, thank you. Let me take this question. The first thing I would say is that this is very much connected to the scale that we have achieved in quick commerce that I just shared with you. We have a massive scale now of users on our quick commerce channel every day. Basically, we're talking about 150 million active users on a daily basis. Within those users, there are some who go to the store themselves to do self-pickup, and that also includes group purchase using coupons. From the perspective of satisfying the needs of our users, and in particular those who go offline in-store, there's a lot of synergy there. We will also consider providing more diverse services to these users. In fact, we're already doing some testing and piloting in certain selected cities.

Speaker 1

Next question, please.

Speaker 7

Thank you. Your next question comes from Joyce Ju at Bank of America. Please go ahead.

Speaker 6

谢谢管理层给我这个提问的机会。我的第一个问题是关于刚刚管理层提到的关于那个三年坚持投入这个AI和内需这两个重大的历史机遇的。因为我们知道在AI方面我们有一个3800亿的这个三年的投资计划。那么在内需方面我们是怎么考虑这个投入的节奏的？它涵盖的部分除了刚刚我们提到的就是即时零售、外卖，还会包含哪一些，比如说在供应链或者是消费者侧的投入，然后它的节奏会是怎么样的？然后我的第二个问题是关于我们这个核心的这个customer management revenue增长的，我们这个季度还是保持了非常强劲的10%的这个年对年增长。但是到了今年九月份以后，我们去年那个基础服务费增加的带来的这个基数的问题可能就会逐渐的开始变得困难一点。就想问一下我们接下去是怎么理解这个全站推渗透所驱动的，比如说未来几个季度的这个customer management revenue的这个持续的这个take rate的增长，以及就是我们看到外卖或者即时零售所带动的流量或者是这个消费频次的增长，会不会就是帮助到我们的这个GMV加速，然后同时也就是帮助我们的customer management revenue就是进一步的有所这个增速的这个加持。谢谢。

Speaker 6

Thank you, management, for taking my question. My first question has to do with the pace of investments going forward. You mentioned your commitment to the three-year plan to invest ¥380 billion in cloud and AI. I'm wondering if you could also tell us about your investment plans going forward on the commerce side, on the consumption side. What will the pace of those investments look like? Apart from investing in quick commerce, what other investments are you contemplating, for example, in supply chains or in users? What will the pace of those investments look like? Secondly, I'd like to ask about CMR. We saw strong growth in CMR this quarter, up 10% year on year. We know that heading into September, the positive impact.

Speaker 7

The software service fee that you started implementing last year will diminish. Looking forward, how much positive impact will QN3 model penetration have on CMR growth? Beyond that, the incremental traffic and GMV being driven by quick commerce, how much positive impact will that have on CMR? Thank you.

Speaker 1

好, 谢谢你的问题。我来回答这个问题。首先, 这个关于我们对于在消费的这样一个, 这么样的一个历史机遇的这样一个投入来讲, 其实我们不是刚刚现在开始投入。在这个方面我们一直在保持投入, 不管是在供应链方面还是在用户方面。这里通过我们不同的业务, 这里包括比如说在淘宝、天猫, 原来我们就在用户端做很多投入, 比如说在供应链端, 我们不光是在淘宝、天猫, 我们在盒马等等, 都是对在供应链上面的一些投入。近来我们提到这样一个¥50 billion的一个大的投入, 还是看到了一个重大的这样一个整个从远进场结合到近场消费的这样一个大的历史机遇的情况下, 我们增加的这样一个¥50 billion的一个投入。从投入的角度来讲, 我们会根据具体的市场情况控制好我们投入的节奏, 同时根据整个的市场的发展来确定我们投资投入的最终的一个一个大的一个这个额度。这样的一些投入最终使我们过去的投入加上这次的投入, 最终使我们拥有了很强的在消费市场的这样一个能力, 也让我们能在这次做这样一个整合, 能合在一起抓住这样一个历史机遇。所以这是在消费端的一个投入的我们整体的考虑。

Speaker 7

Thank you. Let me take this question. Given the historic opportunity to invest in the consumer market, today we're certainly grasping that, but our investments in the consumption market are not just starting now. We've always been making investments in the user side. Certainly, the Taobao and Tmall Group had been investing in users. On the supply chain side, not just the Taobao and Tmall Group, but also Freshippo and other of our businesses were investing in the supply chains as well. When we talk about this large investment that we're now making in the consumption market of $50 billion for developing quick commerce, this is incremental. This is a new investment on top of those investments that we were making. We will pace the investment cadence and rhythm in line with the market circumstances and market developments to ensure that it makes sense.

Speaker 1

take rate 的影响。同时因为在闪购方面我们看到很正面的, 不管是在用户方面, 在购买瓶子方面带来的很好的影响, 在这些方面也会增加对我们在这个 take rate 上面的, 包括在 CMR 上面的 positive 影响。所以从目前的情况来看, 我们预计接下来的几个季度整个 CMR 还是会保持像类似过去两个季度一样较高速的一个增长。

Speaker 7

Thank you. Your second question had to do with CMR, and I think that the key point there was the impact of take rate. In this quarter, as we said, CMR growth was positive and robust, and this was mainly because of a large increase in take rate. There were basically two major reasons for that. One was the 0.6% software service fee, and the other is QN3, which is itself powered by AI, continuing to achieve deeper penetration. I think that in the coming quarters, we can expect to see also positive impacts on CMR from these aspects. At the same time, there'll be positive impact on CMR from quick commerce as well, where we're driving user growth as well as higher user frequency, which will result in higher take rate.

Speaker 7

We would expect that in the coming couple of quarters, you can expect to see relatively rapid growth in CMR, as you are now seeing.

Speaker 8

Next question, please.

Speaker 7

Thank you. The next question comes from Yuan Liang from Citigroup. Please go ahead.

Operator

关于头号账号，感谢接受我的提问。我们一直关注公司模型的一个进展，在QN3的这个blog上，我们其实有看到，QN3正从专注于训练模型的时代过渡到以训练agent为中心的一个时代。那我的问题是，以训练为agent为中心的一个时代，我们还需要增加哪些能力和资源上的投入，以及管理层能否分享一下我们在agent产品以及应用产品上的一些进展？谢谢。

Speaker 7

Thanks. Good evening, management. We've been following very closely the developments of your models, and looking at the QN3 block, what we see is that it marks a transition from an era where the focus is on training to one where it's all about agents, an agent-centered era. My question is, what additional capabilities and resources or investments do we need in this transition period? Can you tell us a bit about some of your latest developments around agent products and agent applications?

Speaker 2

the same time, we have a very good sandbox environment suitable for agent operation, and our models are also iterating and evolving to better adapt to agent usage.

Speaker 7

Thank you. Let me take that question. Indeed, we do see the overall evolution path when it comes to models going from simple chatbots toward agents. There are several trends that we can see in the era of agents. One certainly is that models require larger context windows to be able to undertake more complex tasks with longer chains of thought. They need to be able to utilize multiple different tools or chains of tools. The agents need to be able to access different systems, call on different internal systems within the enterprise. These developments also create new opportunities for us as an infrastructure provider. Many of these agents will need virtual servers, or they'll need to have many browser windows open simultaneously, or they'll need many mobile virtual machines and sandbox environments. For a cloud vendor like Alibaba Cloud, these are all very positive developments.

Speaker 7

We're supporting numerous clients in numerous different sectors, and we can provide all of these with a new product called Agent Bay, which provides a sandbox environment specifically for agents. This is very much an agent-driven era in AI and cloud development, and for us, this is an excellent opportunity.

Speaker 1

Okay, 我再补充两点, 就是我们在这个问题上的一个思考。我们觉得第一个在于模型上面, 其实我还想再补充一点, 我们觉得尤其进入到这个Agent驱动的这个AI时代, 模型的coding能力是一个非常重要的重要的能力, 因为我们觉得未来绝大部分的场景其实可以用一个擅长coding的模型结合非常多的连接, 非常多的工具连接, 非常多的这个企业系统, 其实可以解决非常多的企业内的这些任务, 或者消费者端的一些更复杂的任务。另一方面呢, 我还想提一点, 就是在于Agent产品上, 我们还是有非常多的和Alibaba Group的整个大生态结合的一些产品, 比如说我们现在的非常多的企业, 电商企业, 它需要一些客服端的产品。我们现在Alibaba Cloud除了在提供基础的算力和基础设施之外, 其实我们也在协同像Taobao, 像钉钉, 像高德, 像我们的支付宝这样去提供更多的能够在业务层面去自动化解决任务的一些工具。通过这些工具, 使得我们这些企业开发的这些AI agent能够更好地解决, 能够更好地解决他企业内的这些任务。

Speaker 7

Let me add to that by sharing some more of our thinking about models as they relate to agent-driven AI. I think that coding capabilities will become very important because models with strong coding capabilities can be connected to lots of different tools and lots of different enterprise internal systems. In that way, they'll be able to solve for many tasks within the enterprise or even to solve for some more sophisticated tasks on the consumer side. Another point I should add with respect to agentic products is that we have quite a few products that can tie into that, that are excellent within the Alibaba ecosystems. For example, a lot of enterprises, especially e-commerce enterprises, need a client service product.

Speaker 7

Within Alibaba Cloud, apart from providing compute and infrastructure, we're also able to synergize with Taobao, with DingTalk, with AMAP, and even with Alipay in order to be able to provide more kinds of automated solutions at the business level. Through these tools, these enterprises can develop AI agents that are better able to solve for these various tasks within the enterprise.

Speaker 8

Next question, please.

Speaker 7

Thank you. Your next question comes from Alex Yao. Please go ahead.

Speaker 2

Alex, 谢谢关于反正接受我的提问。我想再问一个关于这个外卖和闪购的问题。那其实这次也不是我们第一次主动进攻这个市场。在2018年我们把Ele.me收购进来以后，其实在之后的两三年还是花了很多的精力和资源去尝试进一步加大我们在外卖这个行业里面的市场份额。后来两三年从结果上来看，我们这个战略意图其实是没有实现。我也曾经去问过DeepSeek为什么阿里下面的饿了么就还是打不过美团。DeepSeek给我的回答是富养的儿子打不过穷养的创业狼。不管DeepSeek他说的对不对，肯定我们是经过很多的复盘思考。在这一轮的大举进攻外卖的动作下面，我们会采用一些什么不同的战略或者是思路来进一步最大化我们的投资回报率。包括提升我们实现我们战略意图落地的这样的一些新的思考，能不能跟我们做一些分享。谢谢。

Speaker 7

Thanks, management, and good evening. I have a question coming back to quick commerce, or instant commerce, because it's not the first time that Alibaba has tried to enter this market, from the acquisition of Ele.me back in 2018. Lots of time, energy, and resources were spent on trying to grow our market share in that space, but it seems that over a period of two to three years, that original strategic intent really wasn't realized. I asked DeepSeek why it is that Ele.me under Alibaba still couldn't beat Meituan and be bigger than Meituan. What DeepSeek told me was that the son of the rich merchant can't beat the entrepreneurial wolf who was raised by a poor family. Anyway, it doesn't matter whether DeepSeek is right or wrong, but I'm sure that we've done a lot of reflection and thinking going into this new round in the battle.

Speaker 7

I'm sure that you will be taking some different strategies or approaches to maximize success. If you could tell us simply what's different this time and what are the different tactics that we're taking?

Speaker 2

user experience. So, I think these are all capabilities that Ele.me has accumulated over the years.

Speaker 7

Thanks. I guess you could ask DeepSeek again, but I'll take a stab at answering that. It's true that we invested, we acquired Ele.me and have been investing in it for many years. I think I would begin by saying that Ele.me has actually made a lot of progress over these years, and that may not be reflected in market share, because market share is related to our investment as well as our strategy, as well as traffic. I would say that over these years, Ele.me has made tremendous improvement in terms of infrastructure development and capabilities development. If that weren't the case, then it simply wouldn't have been possible for Taobao Instant Commerce to have achieved such rapid development in such a short period of time.

Speaker 7

You know, we couldn't start from zero and build this business from scratch and in just two to four months, be able to service 120 million orders, and not just 120 million orders, but to do so with an excellent user experience. I think that all of that credit goes to Ele.me and the experience and capabilities that we built up following that acquisition.

Speaker 2

对, 然后这个业务因为它需要有足够多的商户, 有足够多的运力, 然后也需要有足够多的C端的用户, 只有在这三者都具备的情况下, 我们的投资才是有效率的。对, 如果这三者其中有一端或者两端都非常的弱的话, 那我们的这个投入效率会非常低。那么今天恰巧饿了么跟淘宝的这样的一个整合, 我们可以看到我们有淘宝这样海量的用户, 并且都是非常活跃的用户, 然后我们有饿了么基础的这样的一个商户, 同时也有我们的一个整个运力的就是物流的这样的一个体系。那么我们在这个基础上做这样的一个投资。对, 然后第二就是说我们这个投资的这样的一个逻辑并不是只单独看外卖这个业务, 而是看一个在整个电商短期、中期、长期的这样的一个综合的收益。我们的这样的一个思考逻辑也是跟以前是有差异的。对, 当然能把这个业务要把它做好, 我们还是有非常多的工作要去努力的。

Speaker 7

To get this business right, you need to have enough merchants, you need to have enough fulfillment capacity or delivery capacity, and you need to have enough consumers, users, on the consumer end. If you're lacking in any one of those things, then your investment efficiency is going to be poor. In terms of where we are today, following the integration of Ele.me into the Taobao app, we have a vast number of users on Taobao, and these are highly active users. We also have the merchant base that has been built up on Ele.me, and at the same time, we also have the fulfillment capacity, the logistics system that we have built up. That's the foundation on which we're making this investment.

Speaker 7

The second thing I would say relates to our investment logic, the way we think about this, because we're not simply looking at the quick commerce business on a standalone basis. We're really looking at what it can do, the overall incremental positive benefit it can provide for our overall e-commerce business in the short term, in the medium term, and in the long term. The logic and the way we're thinking about this is different from the past, and of course, for us to get this business right and succeed in all those goals, there's still a lot of work that we need to do.

Speaker 8

Officer, let's take the last question.

Speaker 7

Thank you. Your next question comes from Gary Yu at Morgan Stanley. Please go ahead.

Speaker 7

Hi. Thank you, management, for the opportunity. I have a question regarding return on invested capital. Given that we are now spending, you know, close to $50 billion in, you know, probably a couple of months on quick commerce, how should we look at the, you know, rate of return of invested capital from these investments? I would imagine if the same amount were to be spent on something on AI, maybe with, you know, much bigger TAM and much bigger, you know, faster growth in cloud, we may be able to see a much better return on investment. How should we think about how we allocate capital internally between, you know, retail and AI investment, going forward? Thank you.

Speaker 2

好, 感谢关键送给我提问的机会。我的问题是关于投入资本的回报率。看来呢, 我们就是几个月的时间在其实零售方面大概投入接近¥50 billion, 那我们应该怎么看待这些投资的一个就是回报率。因为我想如果把同样的这些钱我们投在, 比如说在AI这一方面, 因为云这个增速更快, 而且呢, 这个潜在的市场规模, 这个所谓的TAM可能也更大。我们如何在零售和AI这两者之间分配我们的投资这一方面有什么想法?

Speaker 1

好的, Gary, 我来回答这个问题。谢谢这个问题。我想首先, 不管是今天Eddie这边, 我这边, 我们都提到了, 我们现在看到了两个历史性的最大的机会。第一个就像你说的AI, 第二个就是我们刚才不断在提到的在消费这里的一个机会。而在消费这里的一个机会又是因为从原厂到进场到及时零售这样一个大趋势带来的这样一个历史机会。从这个角度来讲, 这两面的投资对我们来讲都是一个战略性的我们必须要去把握住的机会。

Speaker 7

Thank you. As Eddie and I have both mentioned already on the call, we are faced with two huge historic opportunities today. The first of these is AI, which we've been discussing. The second is consumption, and the opportunity is to transform consumption on that journey from e-commerce to local hyperlocal e-commerce to instant commerce. We absolutely need to firmly grasp both of those opportunities. They're both crucial.

Speaker 1

对于在这两个领域的投入来看，当然这个金额是十分巨大的，从我们自己的角度也是历史性的这么样一个大的投入。但是就像我刚才在我准备的这个里面讲到的，我们不管是从能力的角度还是从资源的角度，资源的角度不管是从我们现金储备的角度还是我们的现金流的角度，还是我们的整个的资产负债表的整个的能力的角度，都让我们有足够的资源在这两个方面都进行。用个Eddie的话叫饱和式的一个投入。那对我们来讲最关键的这个投入的方向是怎么去平衡好一个短期跟长期的回报的关系。比那用一个这个AI方面的投入来讲，我觉得大家已经很明显的看得到，因为这样一个投入带来了我们的云的一个整个增速的不断的提升。刚才Eddie也提了，光是这个季度我们预计在未来的几个季度也进一步会提升。这里当然回来从整个的EBITDA margin的角度，在因为的整个的一个增量的投入，我们更我们目前的first priority还是这个投入。所以对于利润率的角度，可能我们看的会相对少一些，但不代表我们不关注利润率。这在AI方面，对于闪购方面的投入，正如刚才蒋凡讲的，在现在的投入的角度，虽然我们从最终的在这个即时零售上我们还没有赚钱，但是我们已经明显看得到跟淘天的整体的结合，因为带来的流量，因为带来的整体的频次的提升，以及这些流量跟频次的提升能带来这个淘宝这样一个平台的广告等等的提升，包括从原厂向进场转移的提升，这些都是在未来会产生很好的收益的这样一个投入。在这里我想我们有足够的资源，我们更关键的要聚焦的是更关键要注意的是，我们不能只是考虑短期的一个回报而放弃一个长期的回报，我们需要很好的平衡好这一点。

Speaker 7

In terms of our investment in both of those areas, of course, we're talking about very substantial, very large investments. From our own point of view, these are historic investments that we're making. As I said in my prepared remarks, be it from the perspective of our capabilities or our resources, and when I talk about resources, that could include our cash reserves as well as our cash flows, as well as resources across our entire balance sheet. We have sufficient resources to be able to make these very substantial investments. As Eddie said, investments at scale in both of these huge opportunities. The key for us really is how to balance the short term versus long term returns, and where the priority should lie. We can look at that in the context of our AI investments that we've been making.

Speaker 7

I think you will also have seen very clearly already that these investments have already driven increase in the growth rate of our cloud business. As was just said earlier, that's not just for this quarter, but we expect the following few quarters to also see increase in the growth rate in cloud. Of course, we will also look at the business from the point of view of EBITDA margin, but our first priority at this point is on making these investments and not making profits, the profit rate, the higher of those two priorities. That doesn't mean that we're not looking at and we don't care about profit rates, of course.

Speaker 7

In terms of AI investments and the investments in quick commerce, as Jiang Fan just said, we're not yet making any money from those investments in instant commerce, but we can already see very clearly that with the integration of instant commerce into the Taobao app, that's driving increased traffic. It's driving increased frequency, and as a result of that, that's also driving increased advertising as well on the platform. With the progression from e-commerce to instant commerce, all of these investments are going to drive good returns going forward. I'm confident that we have sufficient resources to be able to do this and to remain focused on what is truly critical. I think it's important to note that we should not simply focus on short-term returns and by doing so lose out on the opportunity to make those long-term returns. This does require the proper balance.

Speaker 8

Thank you, everyone, for joining us today. We appreciate your time, and we look forward to speaking with you again soon.

Speaker 7

Thank you. That concludes our conference for today. You may now disconnect your line. Thank you.

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