6/25/2021 What Are The Key Sources Of Revenue For Alibaba?

Jan 7, 2020, 12:00pm EST | 12,072 views

What Are The Key Sources Of

Revenue For Alibaba?
Trefis Team Contributor
Great Speculations Contributor Group
Markets

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Alibaba’s (NYSE: BABA) China

Commerce business, where revenues
are derived from retail e-commerce and
associated marketing services in China,
is expected to contribute $49 billion to
Alibaba’s fiscal 2020 (year ending SHENZHEN, GUANGDONG, CHINA -

March 2020) revenues, making up 65% 2019/10/05: Chinese multinational e-

commerce, retail, Internet, and ... [+]
of Alibaba’s $75 billion in revenues for SOPA IMAGES/LIGHTROCKET VIA GETTY IMAGES

fiscal 2020. The China Wholesale and

Other Revenue is expected to be about 12% of total revenues, where
wholesale commerce and logistics service revenues are primarily driven
by Chinese consumption. Alibaba’s China Commerce business will
provide $32 billion, that is 62% of $52 billion in total revenue the
company is expected to add between fiscal 2017 to 2020. This China
Commerce growth has been key to Alibaba’s 145% price appreciation
during the same period, further helped by stable margins, and strong
expansion in Alibaba’s valuation multiple. Alibaba’s revenue grew 144%
over 2017-2019 to $56 billion and is expected to increase 78% to nearly
$100 billion by 2021.

We have created an interactive dashboard on Alibaba Revenues: How

Does It Make Money?, where we discuss Alibaba’s business model,

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6/25/2021 What Are The Key Sources Of Revenue For Alibaba?

followed by sections that review past performance and 2021 expectations

for Alibaba’s revenue drivers and competitive comparisons with Amazon,
Baidu, and Sina.

[1] China Commerce Division Revenue growth of about $5

billion over the next two years will be driven by growing need
for digital transformation among brick and mortar stores in
the world’s largest country by population.

[2] China Wholesale & Other Division Revenues to grow by

about $4 billion over the next two years due to increase in
logistics and wholesale business.

[3] Cloud Computing Division Revenues to grow by about $5

billion over the next two years due to increase in average
revenue per customer, wider partnerships, and Alibaba’s
launch of newer cloud products. Alibaba’s recently-launched SAAS
accelerator helps deploy cloud native technologies across customer IT
environments to speed up adoption of Alibaba’s cloud.

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6/25/2021 What Are The Key Sources Of Revenue For Alibaba?

[D] International Commerce Division Revenues to grow by

about $3.7 billion over the next two years due to increase in
paying customers and growth in average revenue per customer.

[5] Digital Media & Innovation Initiatives Division Revenues to

grow by about $2.7 billion over the next two years due to
increase in local language content consumption. Over the next 2
years, we expect this segment revenues to increase by $2.7 billion – likely
driven by continued growth in local language content consumption.

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