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<Research>HSBC Research: Not All of Alibaba's RMB10B+ Investment in Food Delivery & Insta-Shopping Is New
Recommend 45 Positive 77 Negative 23 |
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HSBC Global Research has released a report revealing that it held a non-deal roadshow (NDR) regarding the main concerns of investors last Friday (30th) and Saturday (31st) with Michelle Wei and Olivia Sha, who are IR Director and IR Manager at BABA-W (09988.HK) respectively. In terms of stepping up investment, there were Chinese reports saying that Alibaba's total investment in food delivery and insta-shopping could exceed RMB10 billion. In response, Alibaba clarified that not all of this investment is new. Part of it is ongoing user acquisition investment by Taobao Tmall (TT). In any case, TT is still in the investment phase, so user growth and experience improvement will be prioritized over profit maximization. When asked about insta-shopping as a new growth driver, Alibaba cited the prediction made by the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce saying that insta-shopping will create an incremental market opportunity of RMB2 trillion domestically by 2030. The company is planning to actively expand its market share by leveraging Taobao's strong relationships with brands and merchants, Ele.me's delivery network and algorithms, as well as third-party operational data. Ele.me and Taobao have already achieved over 40 million daily orders (including food and other on-demand retail), compared to rival JD.com's 25 million daily orders. HSBC Global Research maintained a Buy rating on Alibaba with a target price of USD176. AAStocks Financial News |
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