Alibaba
Alibaba (US:BABA) dominates the Chinese e-commerce market, having amassed 726m annual active users through popular marketplaces such as Taobao (a website where Chinese businesses and individuals can sell their products to consumers) and Tmall (a business-to-consumer marketplace).
E-commerce generates over 80 per cent of the group’s revenue, core commerce sales grew by 19 per cent to RMB94bn (£11bn) in the three months to 31 March, despite interference from the outbreak of Covid-19. Further retail growth should come from the push into China’s so-called ‘lower tier’ cities – the company has only reached 40 per cent of the population in less developed areas of China versus 85 per cent of developed regions.
Beyond online shopping, the group is forging ahead in cloud computing. It commands almost 50 per cent of the domestic market and is hoping to rival Amazon (US:AMZN) and Microsoft (US:MSFT) on the world stage. Chief executive Daniel Zhang said in 2018 that cloud computing could eventually become Alibaba’s main business. The segment is growing fast – cloud revenues surged by 62 per cent to RMB40bn in the year to 31 March. While lossmaking at present, increasing scale is edging it closer to profitability and Alibaba plans to invest $28bn (£22bn) over the next three years to expand its cloud infrastructure.