Alibaba chairman Daniel Zhang set out a series of new goals for the e-commerce giant in a new era where “digitization is the new norm” in the company’s annual report released Friday.
Why it matters: Spurred by the Covid-19 pandemic, China’s ongoing digital transformation is attracting attention from the state as well as the country’s biggest tech companies looking to build high-tech infrastructure for cloud computing, supply chains, 5G networks, electric vehicles, digital finance, and more.
“Our digital economy infrastructure–from digital commerce to digital finance to logistics to cloud computing–empowers the whole society with the potential and opportunity to innovate and incubate even more new ideas.”—Alibaba Chairman Daniel Zhang in a letter to shareholders
Details: Included in Alibaba’s 2020 report for the fiscal year ended March was a letter from Zhang to shareholders, which laid out the company’s long-term growth prospects.
- By 2024, the company aims to increase its annual active customers in China to more than 1 billion from its current tally of 780 million, Zhang said in the letter.
- The e-commerce giant plans to facilitate more than RMB 10 trillion ($1.4 trillion) of consumption on its platforms, a 40% increase compared with the company’s $1 trillion gross merchandise volume in the 2020 fiscal year.
- Longer-term goals include reaching 2 billion consumers globally and providing the necessary infrastructure to support 10 million small businesses reach profitability on its platforms by 2036.
- Zhang said that the company is supporting its goals with investments in digital infrastructure related to digital logistics, digital e-commerce, cloud computing, and digital e-commerce.
- Despite all the uncertainties, the one thing for certain is “that the ongoing digital transformation of our economy and society will be unstoppable” Zhang said.
- The company’s total revenue increased to RMB 509.71 billion in the reporting period, up 35% year on year from RMB 376.84 billion in fiscal year 2019.
- Zhang added that Alibaba will continue to pursue the three strategic pillars of globalization, under which it’s already serving 180 million users outside China, growth in China’s domestic consumption, and big data powered by cloud computing.
Context: Alibaba rival JD.com is also investing heavily in infrastructure projects, including its in-house logistics network, smart supply chain, and technology innovation.
- China, which set out the importance of the “new infrastructure” initiative during its Two Sessions event, plans to spend RMB 1 trillion on the initiative with half going to high-tech industries.