Executive Summary

The Coresight Research team attended Alibaba Group’s annual Investor Day event in Hangzhou, China, this week. Our top takeaways include the following:

• Alibaba Chairman Jack Ma expects some near-term challenges to China’s consumer economy, including the US-China trade war, but he predicts that the country’s economy will remain resilient over the longer term. Alibaba’s growth will be fueled by growth of the middle class in China, where the number of middle-income consumers is expected to soon rise from 300 million to 500 million.
• New products, new markets and new experiences are supporting growth at Tmall, according to Tmall President Jet Jing.
• Wang Lei, CEO of Ele.me, a food-delivery startup acquired by Alibaba earlier this year, pointed to significant potential for Alibaba in real-world services such as in-store dining, food delivery and entertainment. The Ele.me acquisition is bolstering Alibaba’s capabilities in last-mile delivery.
• Hou Yi, CEO of Alibaba’s supermarket chain Hema, suggested that Hema is well positioned to serve China’s continuing consumption upgrade. The retailer offers a strong selection of fresh foods and restaurant dishes, sources globally directly from farms and suppliers, has two differentiated private-label brands, and offers rapid delivery.
• Wan Lin, President of Alibaba’s Cainiao Network logistics business, identified four barriers to more efficient logistics in China: multiple layers in the delivery process, redundant infrastructures, low productivity and isolated information.