Alibaba : Announces March Quarter 2021 and Full Fiscal Year 2021 Results
05/13/2021 | 07:30am EDT
Alibaba Group Announces March Quarter and Full Fiscal Year 2021
Hangzhou, China, May 13, 2021 - Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988, "Alibaba" or "Alibaba Group") today announced its financial results for the quarter and fiscal year ended March 31, 2021.
"Alibaba achieved a historic milestone of one billion annual active consumers globally in the fiscal year ended March 2021," said Daniel Zhang, Chairman and Chief Executive Officer of Alibaba Group. "Our overall business delivered strong growth on a healthy foundation, with the Alibaba Ecosystem generating a record US$1.2 trillion in GMV during this fiscal year. Such achievements were built on top of clear value propositions that we offer to consumers and merchants. We remain very excited about the growth of China's consumption economy, which is benefiting from the acceleration of digitalization in all aspects of life and work. We will continue to focus on customer experience and value creation through innovation, as we pursue our mission to make it easy to do business anywhere in the digital era."
"We surpassed our annual revenue guidance in fiscal year 2021 by achieving strong organic revenue growth of 32% excluding the consolidation of the newly-acquired Sun Art. This was driven by robust performance of our core commerce businesses as well as continued growth of Alibaba Cloud. Our adjusted EBITDA grew 25% year-over-year while we increased investments in new businesses and key strategic growth areas," said Maggie Wu, Chief Financial Officer of Alibaba Group. "We expect to generate over RMB930 billion in revenue in fiscal year 2022. Given the market potential and our proven profit and cash flow generation capabilities, we plan to use all of our incremental profits and additional capital in fiscal year 2022 to support our merchants and invest into new businesses and key strategic areas that will help us increase consumer wallet share and penetrate into new addressable markets."
In the quarter ended March 31, 2021:
Revenue was RMB187,395 million (US$28,602 million), an increase of 64% year-over-year. Excluding the consolidation of Sun Art, our revenue would have grown 40% year-over-year to RMB159,952 million (US$24,413 million).
Annual active consumers on our China retail marketplaces was 811 million for the twelve months ended March 31, 2021, an increase of 32 million from the twelve months ended December 31, 2020.
Mobile MAUs on our China retail marketplaces reached 925 million in March 2021, an increase of 23 million over December 2020.
Loss from operations was RMB7,663 million (US$1,170 million) due to a RMB18,228 million (US$2,782 million) fine levied by China's State Administration for Market Regulation pursuant to China's Anti-monopoly Law (the "Anti-monopoly Fine"). Excluding this one-time impact, our income from operations would have been RMB10,565 million (US$1,612 million), an increase of 48% year-over-year.Adjusted EBITDA, a non-GAAP measurement, increased 18% year-over-year to RMB29,898 million (US$4,563 million). Adjusted EBITA, a non-GAAP measurement, increased 14% year-over-year to RMB22,612 million (US$3,451 million).
Net loss attributable to ordinary shareholderswas RMB5,479 million (US$836 million), and net loss was RMB7,654 million (US$1,168 million), primarily due to theabove-mentionedAnti- monopoly Fine. Excluding this impact and certain other items, non-GAAP net income was RMB26,216 million (US$4,001 million), an increase of 18%year-over-year.
Diluted loss per ADSwas RMB1.99 (US$0.30) and diluted loss per share was RMB0.25 (US$0.04 or HK$0.30), primarily due to theabove-mentionedAnti-monopolyFine. Excluding this impact and certain other items, non-GAAP diluted earnings per ADS was RMB10.32 (US$1.58), an increase of 12%year-over-yearand non-GAAP diluted earnings per share was RMB1.29 (US$0.20 or HK$1.53), an increase of 12%year-over-year.
Net cash provided by operating activitieswas RMB24,183 million (US$3,691 million). Non- GAAP free cash flow was an outflow of RMB658 million (US$100 million), compared to an outflow of RMB4,214 million in the same quarter of 2020.
In the fiscal year ended March 31, 2021:
Revenue was RMB717,289 million (US$109,480 million), an increase of 41% year-over-year. Excluding the consolidation of Sun Art starting in October 2020, our revenue would have grown 32% year-over-year to RMB674,420 million (US$102,937 million).
Annual active consumers for the Alibaba Ecosystem reached a milestone of over 1 billion, including 891 million consumers across our China retail marketplace, Local Consumer Services and digital media and entertainment platforms, and approximately 240 million consumers outside China. Annual active consumers on our China retail marketplaces was 811 million, an increase of 85 million from the twelve months ended March 31, 2020.
Mobile MAUs on our China retail marketplaces reached 925 million in March 2021, an increase of 79 million over March 2020.
GMV transacted in the Alibaba Ecosystem was RMB8,119 billion (US$1,239 billion) for fiscal year 2021, which mainly included China retail marketplaces GMV of RMB7,494 billion (US$1,144 billion), as well as international retail marketplaces and Local Consumer Services GMV.
Income from operations was RMB89,678 million (US$13,688 million), a decrease of 2% year- over-year, primarily due to the above-mentionedAnti-monopoly Fine as well as a RMB16,054 million increase in share-based compensation expense related to Ant Group share-based awards granted to our employees. Adjusted EBITDA, a non-GAAP measurement, increased 25% year- over-year to RMB196,842 million (US$30,044 million). Adjusted EBITA, a non-GAAP measurement, increased 24% year-over-year to RMB170,453 million (US$26,016 million).
Adjusted EBITA for core commerce was RMB194,512 million (US$29,688 million), an increase of 17% year-over-year. Our marketplace-basedcore commerce adjusted EBITA, a non-GAAP measurement, increased 17% year-over-year to RMB229,134 million (US$34,973 million). Starting this quarter, for purposes of presenting our marketplace-based core commerce adjusted EBITA, we expanded the list of new initiative businesses that we break out in order to present the progress of our strategic investments as well as the profitability of our marketplace-based core commerce businesses on a like-for-like basis. The new initiative businesses, which now include our New Retail businesses (primarily Freshippo, Tmall Supermarket, Community Marketplaces and Taoxianda), Local Consumer Services, Lazada, Taobao Deals, Cainiao Network, and others, represent strategic areas where we are executing to capture incremental opportunities. Comparative figures are presented in the same manner accordingly.
Net income attributable to ordinary shareholderswas RMB150,308 million (US$22,941 million), and net income was RMB143,284 million (US$21,869 million), which reflected the above- mentionedAnti-monopolyFine and the increase inshare-basedcompensation expense described in "Income from operations" above. Excluding these impacts and certain other items, non-GAAP net income was RMB171,985 million (US$26,250 million), an increase of 30%year-over-year.
Diluted earnings per ADSwas RMB54.70 (US$8.35) and diluted earnings per share was RMB6.84 (US$1.04 or HK$8.09), which reflected theabove-mentionedAnti-monopolyFine and the increase inshare-basedcompensation expense described in "Income from operations" above. Excluding these impacts and certain other items, non-GAAP diluted earnings per ADS was RMB65.15 (US$9.94), an increase of 23%year-over-yearand non-GAAP diluted earnings per share was RMB8.14 (US$1.24 or HK$9.63), an increase of 23%year-over-year.
Net cash provided by operating activitieswas RMB231,786 million (US$35,378 million) and non- GAAP free cash flow was RMB172,662 million (US$26,353 million), an increase of 32% year-over-year.
Reconciliations of GAAP measures to non-GAAP measures presented above are included at the end of this results announcement.
BUSINESS AND STRATEGIC UPDATES
Our China consumer-facing businesses include China retail marketplaces, Local Consumer Services and digital media and entertainment platforms, serving the Chinese consumer sector, which is a RMB41.9 trillion (US$6.4 trillion) market for the twelve months ended March 31, 2021, according to the National Bureau of Statistics. Our China consumer-facing businesses served 891 million annual active consumers during the twelve months ended March 31, 2021. Our international retail marketplaces, which include mainly the AliExpress cross-border retail platform and Lazada in Southeast Asia, served approximately 240 million annual active consumers during the same period. Our China and international consumer segments combined to serve over one billion annual active consumers and generated RMB8,119 billion (US$1,239 billion) in GMV.
Our digital infrastructure, such as smart logistics and cloud computing, which enables and underpins across our platforms to serve our major commerce, local services and entertainment businesses, gives us unique technology-driven capabilities to meet changing consumer demand and help our enterprise customers and partners achieve digital transformation.
China Retail Marketplaces - comprehensive product supply and engaging user experience drive consumer growth and high consumer retention rate
In March 2021, our China retail marketplaces had 925 million mobile MAUs, representing annual and quarterly net increases of 79 million and 23 million, respectively. There were 811 million annual active consumers on our China retail marketplaces for the twelve months ended March 31, 2021, representing annual and quarterly net increases of 85 million and 32 million, respectively. In fiscal year 2021, approximately 70% of new annual active consumers were from less developed areas.
In fiscal year 2021, the strong GMV and user growth on our China retail marketplaces reflected our strategic focus on less developed cities and towns and broadening offerings of products and services to meet diverse
consumption demand. Overall online physical goods GMV, excluding unpaid orders, grew 21% year-over- year in fiscal year 2021, driven primarily by the fast-moving-consumer-goods (FMCG) and home furnishing categories, and 33% year-over-year in the March quarter, driven primarily by the apparel and home furnishing categories. For the March quarter, Tmall online physical goods GMV, excluding unpaid orders, grew 26% year-over-year and Taobao online physical goods GMV, excluding unpaid orders, grew even faster as SME merchants recovered from the pandemic.
Our app platforms appeal to a growing and increasingly diverse consumer base at various income levels as well as present different purchase use cases for the same consumer. Taobao Deals (特价版) offers value-
for-money products for the price-conscious consumer and achieved rapid growth in fiscal year 2021. Annual active consumers of Taobao Deals reached over 150 million for the twelve months ended March 31, 2021. Taobao Deals continues to be an offering that attracts incremental users especially in less developed areas, and we have seen robust retention rate given its clear value-for-money proposition and its expanding product selections in different categories.
We also saw increasing engagement of the existing consumer base on our China retail app platforms. The longer a consumer has shopped on our platforms, the more they spend through more orders across more product categories. In fiscal year 2021, average annual spending per consumer on our China retail marketplaces reached over RMB9,200 (US$1,404). Consumers on our China retail marketplaces exhibit high retention across all spending levels.
A key to the success of our business is broadening product supply, including increasing the range of branded and imported products, going upstream to directly source agricultural products and expanding the breadth of selection of value-for-money and long-tail products. Consumption upgrading also helped to drive our business, as more consumers are purchasing from flagship stores of high-end brands and international retailers on our platforms. More than 200 luxury brands and retailers, such as Cartier, Farfetch, Gucci, IWC and Van Cleef & Arpels, operated their flagship stores on our China retail marketplaces, as of March 31, 2021.
The Taobao app is the largest social commerce platform in China, offering rich, highly relevant and curated content and features that enable merchants to engage with consumers through live-streaming,short-form videos, interactive games and microblogs. Among these interactive features, livestreaming is one of the fastest growing with significant scale. Taobao Live GMV reached over RMB500 billion (US$76.3 billion) in fiscal year 2021.
New Retail - multi-format New Retail businesses built on an expanding digital supply chain and increasingly diversified fulfilment services
Our New Retail strategy is to develop a digital commerce infrastructure that offers an upgraded consumer experience by seamlessly integrating online and offline. Over the years, we have helped many retailers digitally transform their businesses and created multiple retail formats that have enabled new consumption experiences by leveraging our consumer insights and technology. These New Retail businesses are supported and strengthened by our ecosystem with an expanding supply chain and increasingly diversified fulfilment services.
Our New Retail commerce infrastructure now offers a full range of high-frequency fulfilment services that include on-demand delivery, same-or-next day delivery and next day pick-up services for a full range of consumable and physical products. We will continue to expand all of these fulfilment services across China to reach and serve even more consumers in both large cities and less developed areas as well as drive higher purchase frequency through more effective cross-selling on our China retail marketplaces.
Community Marketplaces - As part of our latest exploration in New Retail, we started the Community Marketplaces business in select regions in China. Our Community Marketplaces business is supported by our next-day pickup fulfilment services and the supply capabilities of Freshippo, Sun Art and other partners. Given the initial success and long-term growth potential, we established a new business group in early 2021 to consolidate the resources and capabilities of the Alibaba Ecosystem in order to accelerate the growth of our Community Marketplaces business. Our Community Marketplaces are rapidly expanding their logistics and fulfilment infrastructure and aim to achieve broad coverage across mainland China within the next twelve months.
Freshippo - Our self-operated retail chain Freshippo (known as "Hema" in Chinese) continued to execute a multi-format and multi-banner expansion strategy. In fiscal year 2021, Freshippo achieved healthy same- store sales growth, enriched and optimized its product selection and introduced new initiatives to improve customer experience. As of March 31, 2021, we had 257 self-operated Freshippo stores (compared to 202 stores as of March 31, 2020), primarily located in tier-one and tier-two cities throughout China.
Taoxianda - Taoxianda, our online-offline retail integration service solution for FMCG brands and third- party grocery retail partners, puts us at the forefront of transforming the retail industry by digitalizing all aspects of store-based operations. Taoxianda drove Sun Art's digitalization of its hypermarkets and, along with our other businesses, facilitated the growth of Sun Art's online revenue. For the twelve months ended March 31, 2021, online revenue represented 24% of Sun Art's sales of goods, increasing from 17% for the twelve months ended March 31, 2020. As of March 31, 2021, in addition to Sun Art, Taoxianda helped 42 retail chains to open online stores with services available across 145 cities in China and enabled over 168 retail chains, supermarkets and marketplaces to digitalize their marketing program.
Local Consumer Services - Investing for new user acquisition and enhanced consumer experience
In fiscal year 2021, Ele.me continued to improve its merchant supply and operating efficiency, as reflected in the increasing number of merchants, higher portion of GMV from national and regional chains and improved unit economics year-over-year. Building on this progress, starting from the March quarter 2021, Ele.me stepped up its investment in user acquisition as well as user experience enhancement. For example, during the Chinese New Year period Ele.me increased its rider subsidy to address the usual shortage of riders. As a result, Ele.me's average daily number of paying members continued to grow strongly at approximately 40% year-over-year during the March quarter.
Cainiao Network - improving efficiency across the Alibaba Ecosystem and the logistics industry in China and internationally
Cainiao Network continues to expand both its domestic services and global smart logistics infrastructure by deepening integration with logistics partners as well as offering more products and services. In fiscal year 2021, after elimination of inter-company transactions, Cainiao Network achieved solid revenue growth of 68% year-over-year, to RMB37,258 million (US$5,687 million), representing 5% of our total revenue. Cainiao Network also reached an important milestone of generating positive operating cash flow during fiscal year 2021.
A key driver of Cainiao Network's strong financial performance is its global smart logistics infrastructure, which took years of investment to build. This global logistics infrastructure now enjoys increasing adoption of "Fulfilled by Cainiao" services by merchants from our fast growing cross-border businesses, including AliExpress and Tmall Global. Daily package volume on Cainiao Network's global parcel network for the month ended March 31, 2021 exceeded 5 million.
In China, Cainiao Network expanded the coverage of Cainiao Post (neighborhood and campus stations and residential self-pick up stations), as well as improved the customer experience of Cainiao Guoguo (crowdsourced parcel pick-up and delivery service). In March 2021, Cainiao Post's average daily package volume nearly tripled year-over-year.
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