Analyzing Alibaba's Earnings: Taobao DAU, a farewell address, and the Two-Pronged Communication Strategy
Analyzing Alibaba's Earnings: Taobao DAU, a farewell address, and the Two-Pronged Communication Strategy
Taobao DAU, Jiang Fan's return to the Partnership, a farewell earnings call and the dual-track IR communications strategy
I’ve written about Alibaba from many different angles, from its more recent historic reorganization to Alibaba’s lackluster growth in international e-commerce, and gone on a podcast to discuss Alibaba vis-a-vis Chinese tech. It's personal for me, having worked at Alibaba Group's New York office in International Corporate Comms and observed the company from the inside. It's also a captivating story of one of the OG Chinese companies going global and "made it," culminating in its successful IPO.
The world is a much harsher place for Chinese companies these days. While Alibaba had first-mover advantages to test the water on how and what to communicate to the world, its overseas e-commerce business had a decade-long headstart, it is losing out to challengers like Shein and Temu. Alibaba is at a crossroads, defining once again its identity in a post-restructuring world and the aftermath of the Jack Ma era.
Earnings Narrative Snapshot
BABA 0.00%↑ just announced its latest quarterly earnings. The financials look rosy despite China’s macroeconomic challenges and softening consumer demand.
The positive earnings report didn’t do much for investor sentiment. Share prices aside, how sustainable is the growth? At first glance, this quarter’s operating income growth is an impressive 70% YoY. But a significant part of this boost comes from the reversal of a share-based compensation expense, and when excluded, the YoY growth drops to 43%. While 43% is still impressive, shareholders should question if the company can maintain the quality of stable earnings without one-off benefits.
A year ago, I argued that Alibaba was already in the mature growth stage. Still, it has not transitioned to “acting its age” related to efficiency, corporate culture shifts, and the ability to execute outside China. There have been subtle but significant shifts in the past couple of years that point to a decline in innovation culture, and you can read about it in my FT piece (scroll down for full article).
A few things stood out for me in the latest earnings results:
The obsession with Taobao’s Daily Active Users (DAU) signals close competition with challenger PDD, not just in overseas markets but on its home turf in China.
Cherry-picking data to report in English IR comms content versus Chinese earnings media assets.
During this quarter, Jiang Fan, CEO of the international business unit, was reinstated to his rightful throne in the Alibaba Partnership despite his extramarital scandal that shook the cultural core of the firm.
Hey, What’s the Big Idea: DAU (cue Mika, and sing it!)
This quarter's core commerce keyword is user growth. On the last earnings call, Alibaba announced the pivot to focus more on DAU and less on GMV (gross merchandise value). It was a precursor to the all-in user growth strategy.
Let’s look at how Alibaba frames the Taobao DAU growth as “wins.” The Chinese earnings infographics show actual numbers, not just percentages: “Taobao's daily active user count has increased by 6.5% year-on-year. The average daily active users in June reached 402 million."
Taobao has reason to be proud of the results. Since PDD’s DAU surpassed Taobao for the first time during Lunar New Year in February 2021, PDD has consistently maintained its lead since February 2022. This is the first earnings since Taobao returned to the number one spot in April this year.
The user number growth is significant because Taobao is locked in a tight fight for users with PDD, its formidable challenger at home and overseas. It’s increasingly a zero-sum game to fight for the same wallets, and Taobao needs to prove it’s improving to win back the consumers it lost.
A Tale of Two Earnings Communication Strategies
Generally, Alibaba's Chinese IR communications favor "record-breaking" language to emphasize the growth narrative. Just zooming in on the Taobao DAU language, the Chinese infographic includes forward statements like “The leading advantage continues to expand” (领先优势继续扩大), different versions of the Chinese word DAU (i.e. 平均日活，日活跃用户数，用户活跃度) and other words that imply progress (i.e. 高位，刷新纪录，历史新高）
In contrast, the U.S. earnings content appears much more subdued, and understandably so (hi, SEC!).
However, is this differentiation necessary? Considering that Alibaba is a U.S.-listed company, if specific figures are public knowledge in Chinese, shouldn't English-speaking shareholders have equal access to the same information?
Another concern is the excess information used to highlight success but lacking substance. For instance, simultaneously addressing Taobao's move towards "value-for-money" consumers and the 88VIP program's focus on ultra-high spenders presents a mixed message.
Concrete figures back Taobao's user and revenue growth, yet the narrative for 88VIP relies on qualitative descriptors like "reaching historic heights" and "GMV grew double-digit during 618 promotion." 88VIP got some “prime real estate” in the widely distributed infographic. Yet, it was only mentioned once during the call and in the release and offered no context. Double-digit growth means nothing if there are no baseline comparison figures available. Is 88VIP that important after all? I’m not so sure, based on the mixed message from the comms.
These infographics are not official IR press releases and are a gray area at best; however, the bottom line is this: intentional opacity does not make for informative and prudent shareholder communication.
Jiang Fan’s back and poised to rise higher
I analyzed the role of psychological safety in the context of Alibaba’s corporate culture in the previously mentioned FT piece. The existing communication hierarchy and the power dynamic were stalling the pace of innovation and eroding trust. This situation may have become more challenging with the ongoing pace of layoffs and restructuring.
Jiang Fan’s scandal is a case in point. Netizens quipped: “When low-P employees (Alibaba’s old corporate ranking was called P-levels) overstep the “red line” and do something wrong, they’re gone. When an Alibaba executive at the high p-level steps over the boundary, the “red line” is gone.”
Jiang Fan is back in the Partnership and leading the international business BU with glowing reviews from respected Chinese media outlets, with nary a mention of his alleged extramarital affair. His business performance is one thing, but the incident should be analyzed with Alibaba's corporate values and governance.
So Long, Farewell (another song…)
This is the final earnings call led by the current Chairman, Daniel Zhang, and he is passing the baton to Joe Tsai, Executive Vice Chairman and founding member of Alibaba. In his farewell speech, Daniel didn’t mention his signature initiative, the Middle Platform Strategy. Instead, he defined his legacy as shepherding the company through the three strategies of “consumption, computing, and globalization since 2015.” This final scorecard is the starting point of a new era against the backdrop of more than 6500 layoffs in one quarter, six new Alibaba entities controlled by the same people as before the restructuring, and an uncertain competitive e-commerce landscape in China and abroad.
I would love to hear your thoughts! Let’s connect on Twitter and Linkedin, or send me a note to get in touch.
阿里的“成熟化”、创新和企业文化的矛盾
更新于2022年8月18日 18:34 杨方曦，王英良为FT中文网撰稿
这个从高速增长到长期价值的“换挡”过程，考验的是阿里“开着飞机换引擎 ”的执行能力，重新聚焦和稳定核心业务的能力。
近期，受多种因素的复合作用，软银集团大幅减持阿里巴巴，持股比例从23.7% 降至 14.6%，套现税前利润约340亿美元。减持后，软银不再将阿里的部分利润计入自身利润，阿里只是其账面上众多投资中的一笔。软银的“自救”是为应对全球经济放缓，开源节流的大趋势，也是对阿里未来增长不确定性的担忧。这也反映出阿里在投资资本决策中的价值和重要性有所降低。
另外一个事实是阿里的营收确实出现了放缓。8月4日晚，阿里公布 自然年2022年二季度业绩，收入2055.55亿元，经调整EBITA同比下降18%至344.19亿元。从利润看，阿里净利润为202.98亿元，同比下降53%。本季度阿里股份回购力度也进一步增强，相比上季度以约20亿美元回购了约1780万股美国存托股，本财季，以约35亿美元回购了约3860万股。与众多成熟公司一样，阿里也尝试以股票回购表明维持股价的决心，以此留住投资人。
面对主营业务国内商业收入的减少和竞争对手的增加，持续探索全球化是阿里寻找新的盈利空间，以及完成“2036年服务全球20亿消费者”这个目标的必经之路。2022年4-6月，阿里国际商业收入占总收入比例为7%，而2022财年这一数据也是7%。今年4月，阿里新设海外数字商业板块，并调整了组织结构。面向海外市场的多家子公司包括全球速卖通、国际贸易（ICBU）两个海外业务，以及Lazada，都由前天猫总裁蒋凡分管。本季度，阿里巴巴国际商业分部收入为154.5亿元，同比增长2%。阿里对国际商业的策略也调整为：保持增长，允许有亏损但不能没节制。
宏观环境的影响——阿里的“成熟化”和资本市场的期待
每一家公司都会经历从初创、成长、蜕变、成熟到衰落的生命周期。在成长阶段的末期，利润赶上销售周期，公司实现正现金流。随着市场达到饱和，增长放缓，虽收入达到峰值，但成本增加导致利润下降。对于任何规模的公司来说，步入成熟期都是一个节点，在这个阶段需要务实的战略眼光，并在必要时做出破局的选择。重新聚焦业务，追求稳妥着陆是首要目标，以此为未来打下稳固的基础。阿里现有投资人看中的是公司的盈利增长率、中国崛起的庞大中产阶层和阿里在中国市场的领导地位。然而，最新的财报种种细节显示，年活跃用户超过10亿，23岁的阿里，正在进入商业周期的成熟阶段，未达到投资者预期。面对国内经济增速放缓，阿里仍试图努力证明自己依然处于壮年。长期而言，以价值为导向的长期投资主义最终将取代当前以增长为导向的投资，但这个从高速增长到长期价值的“换挡”过程，考验的是阿里“开着飞机换引擎 ”的执行能力，重新聚焦和稳定核心业务的能力，以及开拓新业务的能力。这些能力开始取代创新在业务发展中的权重。
效率问题还是企业文化壁垒？
从内部管理机制看。通常而言，成长公司更看重文化，而成熟公司更看重效率。美国硅谷成熟科技公司的代表Meta和谷歌最近表示要求员工提高决策和执行效率，这在美国引发讨论。员工更专注、更高效是所有管理者共同的追求，但效率问题和公司结构与决策机制密不可分。团队协同、决策和执行效率，不是管理者能单独决定的， 而是受到各级员工的系统网络影响。员工对于层级汇报机制和团队所拥有的“软实力”的认识，决定了他们对于权限的理解。在心理学和管理学里有一个概念叫做心理安全感（psychological safety），即相信自己可以大胆表达意见而不会受到惩罚。一个拥有心理安全感的团队会尝试突破固化的思维，且更愿意分享自己的想法。这些都是带来高绩效工作、创新思维和良好团队氛围的重要因素。当科技公司里扁平化管理落到实处时，团队里到底是谁拍板，沟通过程中谁拥有话语权，会遵循一个心照不宣的模式。无论是“996是福报”的内卷文化， 还是阿里现在固化的“老阿里人”当权的现状，阿里作为一个逐渐成熟的企业，需要思考敏捷性组织在阿里这个庞大的组织结构中到底代表什么。其实早在2020年， 当阿里正式宣布，以杜绝靠写报告混日子和避免形式主义、追求踏踏实实做事为由逐步取消周报之际，恰恰反映出问题到了不得不正视的程度。
作为一家公开使命为活“102年横跨三个世纪”的伟大公司，保持创新导向和人才活力是必不可少的。新鲜血液为促进公司创新和保持充分活力提供了可能性。令人不解的是，在2019年阿里20年年会大庆之际，阿里在一个革新的节点上选择引入新的工牌体系。通过不同的颜色标记，新老员工在职年份，是编制内员工还是合同工，一目了然。阿里的层级除P级之分，职务相对扁平，但不代表没有阶层之分。在一个“老阿里人”享有独特权利优势的大公司里，让大家一目了然看到一个人在公司的“工龄”，能快速直观地评定一个人的层级及其“软实力”，这样的体系进一步固化了已有的权利结构，并且滋生类体制内的“官僚文化”和“倚老卖老”的内部文化。在这样的环境里，员工心理安全感难以满足。
追逐新的发展引擎和市场机会
作为成长公司的典型，社交和视频平台快手在近期进行内部管理层结构调整，经验丰富的快手老干部将负责国际化事业部，这是快手第五次出海。在国内市场增量有限、经济放缓的背景下，走出国门寻求海外机会是一个进取型战略。与此同时，阿里海外业务实施对海外消费领域的整合，但“海外数字商业”其新业务轨迹和定义并不清晰。
阿里算是国内第一批“出海”的科技企业。“水土不服”的业务结构和不可调和的中西企业文化冲突，让阿里的出海困难重重。 阿里在美上市之际吸收了一众美国本土成熟公司的高层精英，以期为海外良好的舆论环境奠定基础。这仿佛是在告诉投资人和未来合作伙伴：“我们来了，并愿意用你们习惯的方式开展业务。” 初衷本为入乡随俗，但现实却是骨感的。阿里巴巴2014年9月在纽交所上市， 次年的2015年，前高盛副主席约翰•迈克•埃文斯（Michael Evans）加入阿里担任董事兼总裁，负责打通阿里的国际化道路，并在接下来的很长一段时间里担任阿里全球化的“形象大使”。
然而，阿里的“大手笔”并未得到主流舆论肯定，业务的发展也屡受挫折。这其中的核心矛盾和企业文化密不可分。阿里富有中国特色的企业文化对负责美国业务的中高层的影响有限，他们的欧美大企业背景和心态决定了他们的行事准则：参与中国企业在海外崛起的进程，但无法担当大环境回潮带来的波动并承担相应的责任。阿里海外的企业高层很难通过中国式的组织影响力达到由内而发的文化认同感，而母公司对海外势在必得的雄心不曾改变，冲突显而易见。上市公司的员工股权激励政策一般归属期为四年，而阿里在欧美业务水土不服或业务难以达标的中高层，股权到期之时往往也是他们离开之际。
马云时期的阿里，富有人情味的沟通和“马氏金句”层出不穷，目标宏大且具发散性，给予了阿里人想象力自由。而现在，国际化推进迟滞，迈入成熟公司周期和内部权利的倾斜偏颇，一定程度上成为现阶段阿里发展的阻力。当然这样的情况并非阿里专属，大部分出海的中国企业都面临不同程度但相似的问题。中国尚未出现百年薪火相传、弦歌不断的民族企业，企业成败往往也有时势和机遇的因素。本土崛起并曾受到全球资本追捧的阿里，能否在转型的过程中依然保持对市场的敏锐度，并完成从高速发展到成熟的蜕变？能否创造新的既承载中国商业文化又与西方商业文明衔接的阿里文化？我们拭目以待。