Alibaba's stock price hits new highs: there are bright spots and crises behind it

Last night, Alibaba's stock price climbed above $100 again and stabilized at $101.8. Its market value exceeded $250 billion, surpassing retail giant Walmart.

According to the latest quarterly financial report released by Alibaba, in the third quarter of 2014, Alibaba Group's revenue was RMB 16.829 billion, or approximately US$2.752 billion, a year-on-year increase of 53.7%; the operating profit of its core business was RMB 8.493 billion, or approximately US$1.388 billion; and the adjusted net profit was RMB 6.808 billion, or approximately US$1.113 billion.

The number of active buyers exceeded 300 million. According to Alibaba's financial report, as of September 30, 2014, the number of active buyers on Taobao and Tmall reached 307 million, a year-on-year increase of 52%. This is equivalent to the entire US population shopping on Taobao and Tmall.

The growth of mobile terminal revenue has become the biggest highlight. In the third quarter of this year, the transaction volume from mobile terminals of Alibaba's Chinese retail platform reached 199.054 billion yuan, a year-on-year increase of 263%. The proportion of mobile terminal GMV in the total transaction volume reached 35.8%, an increase of 21 percentage points over the same period in 2013 and 3 percentage points over the second quarter of 2014.

In the foreseeable future, Taobao and Tmall will continue to bring Alibaba monopoly high profits. Although mobile e-commerce has no innovation, it has naturally formed a relatively strong traffic entrance. The recent cooperation between Alipay and Apple also gives the future of mobile payments full of imagination.

However, when Alibaba's stock price was booming, E-commerce Jun couldn't help but pour some cold water on it. The continued rise in Alibaba's stock price was due to Alibaba's continued profitability that exceeded expectations. This was the fundamental reason why investors were optimistic about Alibaba's stock price. However, the performance expectations were too high. Once Alibaba failed to meet the expectations of Wall Street analysts in the future, it would be bad news for Alibaba, and this was not groundless news.

1. Vertical e-commerce in various segments is eroding Taobao and Tmall's market share

Two or three years ago, Taobao and Tmall had almost no competitors, whether in general or in vertical categories. Even with a telescope, you couldn't see any competitors. However, in Q3 2014, the market competition pattern was 60% for Taobao and Tmall, and 40% for Vipshop, JD.com, and Dangdang. The clothing category was once the strongest category for Alibaba, but now it has been penetrated. Books are dominated by Dangdang, 3C communications are occupied by JD.com, home appliances are divided between JD.com, Suning, and Gome, and the automobile market is "controlled" by Autohome. There is No. 1 store in the supermarket; Jumei Youpin has emerged as a dark horse in the cosmetics industry; Jiuxian.com is the only one in the wine category.

2. Can Alibaba break through the existing revenue model under the “decentralized” model of e-commerce 2.0?

Taobao and Tmall under Alibaba are typical e-commerce 1.0 versions, adopting an aggregation model, the core of which is to aggregate a large number of users and then sell traffic users to merchants in an advertising model. As traffic users become increasingly scarce, the price is naturally getting more and more expensive, so the income is growing rapidly.

However, with the development of WeChat, the "decentralized" model of e-commerce 2.0 (handing over users to sellers and merchants to manage themselves, and only charging commissions, payment rates and other service fees) is developing rapidly. A large number of Taobao and Tmall merchants have begun to flock to WeChat to establish their own public accounts, and more individuals are selling goods through their WeChat accounts. In the future, the WeChat public account platform may have a single merchant with sales exceeding 100 million.

However, Alibaba has repeatedly failed in its decentralized model, starting with Weitao and Lawang in December 2012. Now, it is focusing on O2O and has placed the focus of its decentralized platform on Alipay. Alibaba is still exploring its own "decentralized" e-commerce model.

3. Can Double Eleven provide real benefits to users?

In recent years, the transaction volume of Double 11 has long become a festival for Jack Ma to show off Alibaba's monopoly power. In the early Double 11, users did benefit from it and could buy some discounted products, but now, the prices of Double 11 are too high. More and more users are angry about the practice of merchants raising prices a few days in advance and then selling them at a discount on November 11. Double 11 has increasingly become a festival for big merchants to promote sales and clear inventory, raising the prices of old goods that were previously unsold and then selling them at a discount. This is currently a common practice among Tmall merchants.

The source of the price fraud for merchants comes from Alibaba's mandatory requirement that "On Double Eleven, merchants must sell goods at a 50% discount." Merchants have no choice but to do so in the face of increasingly fierce competition on the Tmall platform, where profits are declining. This is a typical Chinese wisdom of "there are policies from above and countermeasures from below." But the most important thing is, is this fair to users? Such price fraud is nothing more than eroding users' trust in Alibaba as a whole.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.