Ali has lost patience with Station B
Ali responds to the reduction of station B: based on capital management goals
Recently, Ali has really not been idle for a moment.
Recently, there was market news that Alibaba will sell its 30.85 million American Depositary Receipts (ADRs) held at Station B, which is expected to be priced at $11.60 per ADR and raise $357.8 million.
In this regard, Ali responded that the sale is mainly based on Alibaba's own capital management goals, and will not affect the business cooperation between the two parties, and Alibaba's related businesses will continue to strengthen cooperation with Station B in various fields.
As of the close of trading on March 22, U.S. stocks Bilibili fell more than 8%.
Source: Q9 Zhitou
It is worth noting that a few days ago, Taobao China Holdings Co., Ltd., a subsidiary of Alibaba, has just reduced some of its shares in Xpeng Motors and cashed out about $314 million.
Prior to the reduction, Xpeng Motors issued an important announcement, namely the "Termination of the Relevant Agreement with Taobao China and the Resignation of Non-Executive Directors". The announcement clearly states that from March 19, 2024, the relevant agreement between the two parties will be fully terminated and will no longer have any legal effect.
Similar to Bilibili, Xpeng also indicated that it will cooperate with Alibaba Group in a number of key areas such as R&D and marketing services, and plans to jointly explore new business cooperation opportunities in the future.
On the surface, Ali seems to have reduced its stake in the two companies, but in fact, the cooperation between them has not been interrupted because of this, but has shown signs of continuing or even deepening.
But then again, the reduction did happen, and this cannot be denied.
The e-commerce newspaper observed that Alibaba has been continuously reducing its portfolio recently, and before that, Alibaba has also repeatedly reduced its stake in Kuaigou Dache.
Why did Ali reduce its holdings of Station B, Xiaopeng Motors and Kuaigou Taxi, let's analyze them one by one.
Let's take a look at Station B first. Since its listing in March 2021, the revenue growth rate of Station B has continued to decline and is in a state of loss, with a cumulative loss of 19.108 billion yuan from 2021 to 2023.
Source: Saying Fortune Cat
Let's take a look at Xpeng Motors. According to the latest financial report, in 2023, Xpeng Motors' loss will expand to 10.38 billion yuan, the gross profit margin will continue to decline to 1.5%, and the gross profit margin of automobiles will only be -1.6%.
Finally, let's take a look at Kuaigou Taxi. From 2018 to 2022, Kuaigou Dache lost 1.0709 billion yuan, 183.8 million yuan, 658.2 million yuan, 873 million yuan and 1.209 billion yuan respectively, with a cumulative loss of nearly 4 billion yuan in five years.
In 2023, Kuaigou Dache will still struggle in the quagmire of losses, with a loss of 640 million yuan in the first half of the year alone, and an adjusted net loss of 120 million yuan.
It is not difficult to see that whether it is Station B, Xiaopeng Motors, or Kuaigou Taxi, these companies have not been able to achieve profitability at present.
As we all know, the essence of business lies in the pursuit of profits, and what investors need is to ensure that their own interests are maximized.
Ali is not a philanthropist, and the choice of these companies to reduce their stake is obviously based on business logic and reasonable.
It is worth mentioning that in terms of A-shares, Ali also showed positive actions.
In December last year, many companies such as YTO Express, Macalline, Beauty Beauty, Focus Media, TransInfo Technology, Meinian Health and Actually Home have experienced the transfer of the company's shares held by Ali Network to Hangzhou Haoyue Enterprise Management Co., Ltd. through an agreement transfer.
Source: Tianyancha
Whether it is a reduction or a transfer, this series of actions undoubtedly shows that Alibaba is focusing on its core business and weakening its investment attributes.
Ali had too much baggage
Why did Ali do this?
In addition to the problems of these companies themselves, Alibaba's internal strategy adjustment and resource allocation optimization are also an important factor.
In November last year, Alibaba Group CEO Wu Yongming said at a conference of financial analyst reports that Alibaba would "invest more resolutely and make more decisive trade-offs", and identified three important priorities for the future: technology-driven Internet platform business, AI-driven technology business, and global business network.
Source: Alibaba's official website
Wu Yongming said that Alibaba will maintain an entrepreneurial mentality, invest more resolutely, make more decisive trade-offs, and seize the new opportunities brought about by the transformation of AI technology with a more flexible governance mechanism to create more customer value.
And the so-called "trade-off" is now reflected in Ali's frequent reduction of holdings.
In February this year, Chairman Joe Tsai of Alibaba Group also mentioned that Alibaba has some brick-and-mortar retail businesses, but these are not core focus businesses, and it is reasonable to exit, but given the current challenging market conditions, it will take time to sell these businesses, but Alibaba will continue to move forward.
Source: Alibaba's official website
As soon as this remark came out, it immediately triggered various speculations in the industry about Alibaba's possible sale of RT-Mart, Hema and other businesses. Although Ali then quickly refuted these rumors, this also reflects Alibaba's determination to reduce the burden and focus on the e-commerce field.
Friends who know Alibaba know that its business territory is large and complex, which to a certain extent makes the burden on its back too heavy.
However, as far as Ali is concerned, the core e-commerce business is about to be "stolen" by Pinduoduo, and it is only possible to return to the top if it unloads its heavy burden and focuses on e-commerce without distraction.
As we all know, since the rise of Pinduoduo, the pressure on Taobao Tmall has been increasing, and the market value of Pinduoduo briefly surpassed Ali a while ago, which also exposed Ali's uneasiness and anxiety to a large extent.
Soon, Ali began to deeply understand the drastic changes in the market pattern and the cruelty of competition, and re-examined its strategic positioning and business model, seeking new breakthroughs and changes.
Since announcing the implementation of the 1+6+N spin-off strategy at the beginning of last year, Alibaba has embarked on a path of change full of challenges and opportunities.
Today, this revolution has gone through nearly a year, and Ali has reached a critical moment of change, and there is no way back.
If you can concentrate on developing your core business by reducing part of your investment footprint, this move is undoubtedly of great strategic value.
Looking back at the year of Alibaba's transformation, it is not difficult to find that its core management has undergone a large-scale blood change. Wu Yongming, Wu Jia, Chen Weiye, Cheng Daofang, Liu Bo, Wang Tingxiang, Wu Zeming, Yan Xiaolei and other young Zhuang factions are all on top, and the young forces of the post-80s generation are emerging.
In fact, at the beginning of Wu Yongming's tenure, he once mentioned the goal of "within 4 years, let the post-85s and post-90s as the main managers refresh the business management team". Today, this strategy of rejuvenating the organizational structure has been initially implemented.
At present, Ali is reducing its investment territory externally and changing its management internally, and its rhythm and direction have been accurately grasped.
Reversing the unfavorable situation is not a one-time effort
The reversal of the situation did not happen overnight. Although Alibaba's latest financial report released in February this year shows that it has achieved both operating income and net profit growth in 2023, the actual effect is not significant.
Taking the fourth quarter of 2023 as an example, Alibaba achieved revenue of 260.35 billion yuan in the quarter, a year-on-year increase of 5%, but its net profit was only 10.717 billion yuan, a year-on-year decrease of 77%.
This shows that although Ali has made some moves in strategic adjustment, it still needs to put in more effort and time to really get out of the predicament.
In this process, in addition to the internal and external reform measures mentioned above, the importance of opening up is also self-evident.
Last year, Wu Yongming mentioned that in order to create the best user experience in the industry in the new era, it is necessary to be more open. Recently, Alibaba's collaborative office software DingTalk announced an important update, that is, WeChat users can directly join DingTalk meetings without downloading and opening the DingTalk client separately.
The successful demolition of the wall between Ali and Tencent also represents a new level of Ali's reform to a certain extent.
The same is true for JD.com, which is now at a critical juncture in the period of major adjustment, and it is urgent to accelerate the opening up. Previously, it listed the open ecosystem as one of the three must-win battles in 2024, which has clearly demonstrated this.
JD.com seems to want to focus more on more effective businesses, concentrating on the important areas first, and then thinking about the rest, like Alibaba.
As far as the current situation is concerned, this strategy of "retreating as advancing" is the most prudent.
Looking at the entire e-commerce industry, Ali and JD.com can be described as a pair of difficult brothers, both under strong pressure from Pinduoduo. However, in the face of fierce competition with Pinduoduo, throwing away the old burden and taking the initiative may be the best way for Ali and JD.com to respond.
Reversing the unfavorable situation is not a one-time effort. The challenges that Ali needs to face are yet to come.
Author | Li Xiang