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Alibaba and the Future of Business

Alibaba is not a retailer in the traditional sense. It doesn’t source or keep stock, and logistics services are carried out by third-party providers. Instead, Alibaba is what you get if you take all the functions associated with retail and coordinate them online into a sprawling, data-driven network of sellers, marketers, service providers, logistics companies, and manufacturers. Indeed, Alibaba does what Amazon, eBay, PayPal, Google, FedEx, all of the wholesalers, and a good portion of manufacturers in the U.S. do, with a healthy helping of financial services for garnish.

Alibaba achieves this by leveraging the new technologies of network coordination and data intelligence. It harnesses the efforts of thousands of Chinese businesses to create an ecosystem that is faster, smarter, and more efficient than traditional business infrastructures.

This is an emerging business model that Ming Zeng, the chair of Alibaba’s Academic Council, calls smart business. Players in the ecosystem share data and apply machine-learning technology to identify and better fulfill consumer needs. This article provides a framework for transforming a company into a smart business.

Lessons from China’s innovative digital giant

Idea in Brief

A new business model.

Alibaba is an example of tomorrow’s “smart business”: a tech-enabled platform that coordinates multiple business players in an ecosystem.

How It Works

Players in the ecosystem share data and apply machine-learning technology to identify and better fulfill consumer needs.

How to Build It

Automate decision making by:

• making sure every interaction yields as much data as possible

• ensuring that all business activities are mediated by software

• using APIs and other interface protocols to ensure smooth interaction among software systems

• applying machine learning to make sense of data in real time

Alibaba hit the headlines with the world’s biggest IPO in September 2014. Today, the company has a market cap among the global top 10, has surpassed Walmart in global sales, and has expanded into all the major markets in the world. Founder Jack Ma has become a household name.

• Ming Zeng is the chairman of the Academic Council of the Alibaba Group, an e-commerce, retail, and technology conglomerate, based in Hangzhou, China, and the author of Smart Business: What Alibaba’s Success Reveals About the Future of Strategy (Harvard Business Review Press, September 2018). He is also the dean of Hupan School of Entrepreneurship, a private business school founded by Alibaba chairman Jack Ma and other leading Chinese entrepreneurs in Hangzhou.

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Alibaba Cloud Pricing: The Complete Guide

• ,   May, 23, 2023

The Foundations

The competitive advantages, pros of alibaba cloud:, cons of alibaba cloud:, 1. data migration, 2. alibaba web hosting, 3. internet of things, 4. elastic computing, 6. networking, 7. security, 1. flexible billing options, 2. simplified payment, 3. after-sales support plan, 4. alibaba cloud pricing calculator, alibaba cloud vps pricing.

Alibaba Cloud might not be the first company that comes to mind when you think of companies that compete with Amazon Web Services (AWS). Amazon Web Services (AWS) is currently the largest cloud computing platform in the world. Alibaba Cloud, along with other cloud services like Azure and Google Cloud Platform, is working hard to take that title away from AWS. In this article, we look at Alibaba Cloud Computing’s pricing, trying to determine how China’s largest Infrastructure-as-a-Service (IaaS) provider structure its products. We also list their most important capabilities, such as building cloud platforms, deploying cloud platforms, copying IaaS, selling IaaS, and making IaaS better.

What is Alibaba Cloud Services?

Alibaba Cloud Services is a cloud computing and storage software company that helps businesses in many different fields, such as e-commerce, hotels, healthcare, media, and retail, manage data transfer, backup, monitoring, and other related tasks. The built-in security center will automatically find security threats like ransomware, viruses, and DDoS attacks, analyze them, and let users know what it found.

If you’re just getting started with cloud computing, Alibaba Cloud is the best choice because it comes with good documentation, a helpful support team and nice pricing structures. Let’s look at the company’s past to figure out why this is the case.

Alibaba Cloud is the name of the part of the Alibaba Group that deals with cloud computing. It first appeared in September 2009 under the name Aliyun. Since Alibaba is the most successful online marketplace in China and the rest of Asia, it was a natural step for the company to make its vast cloud computing capabilities available to the public. Aliyun was Alibaba’s first public cloud service. In 2015, they decided to aggressively grow their business outside of China. As part of this plan, they put $1 billion into Aliyun, which later became Alibaba Cloud. Its goal was to make cloud computing services that would help Alibaba reach its goal of making it easy to do business anywhere.

Gartner says that Alibaba Cloud’s highly scalable cloud computing and data management services have given the company the third largest share of the global cloud computing market. Alibaba Cloud is the biggest public cloud service provider in China right now. Alibaba Cloud also has the most market share in China for cloud computing. It makes it easy for businesses to use other Alibaba products and services, and it also gives them low-cost ways to meet their networking and information needs. The firm’s offerings also make it easier for businesses to meet their own needs.

Alibaba Cloud’s pricing becomes more reasonable considering its run rate of about $2.2 billion per year. It has more than 50% of the public cloud computing market in China. Even though AC’s market share and run rate are still a long way behind those of AWS, Microsoft Azure, and Google Cloud Platform (more on that below), the company’s earnings in the third quarter of 2017 were 104% higher than the same time last year. BI Intelligence also said that the company had more than one million paying customers by the middle of 2017.

At 2018’s Mobile World Congress (MWC), Alibaba Cloud made a big announcement about how its locations will grow. Both in Europe and the US, the company is expanding the range of services it offers. At the moment , Alibaba Cloud runs its business from 21 different data center regions and 63 different availability zones all over the world. But two places in the United States and two places in the European Union are also a part of it. Places in mainland China and other parts of the Asia-Pacific region are the main focus.

Rachel Liu , senior research manager at IDC China’s Enterprise Research Group, says that Alibaba Cloud is the biggest public cloud in China right now. Even though it already has the biggest market share for public clouds, it is still growing quickly. 

Alibaba Cloud offers a wide range of cloud-based products and services, such as managing websites and domains, application services, networking services, security services, analysis and big data services, media and middleware services, and more.

Alibaba Cloud is becoming known as a leader in the field of cloud computing very quickly. For example, they broke records set by other competitors at Sort Benchmark in a competition to sort data. Also, they have set new standards for how to handle DDoS attacks and how many e-commerce transactions they can handle.

With their Hybrid Cloud Solutions, they offer their customers the most up-to-date ways to connect that also provide more security. These solutions give their customers the best parts of both public and private cloud computing models in one easy-to-use package.

In a similar way, Alibaba’s Apsara Cloud operating system is getting high marks for the progress it has made. The Chinese Institute of Electronics has been around for 15 years, but this was the first time the Grand Prize appeared. It was given the award in May 2018, which was the first time the prize had been given.

Alibaba Cloud Pros and Cons

Alibaba Cloud is a global cloud computing platform that offers a broad range of services, including computing, storage, networking, databases, analytics, machine learning, and artificial intelligence. It is one of the largest cloud computing providers in the world, with a strong presence in Asia.

• Wide range of services:  Alibaba Cloud offers a broad range of cloud services, including computing, storage, networking, databases, analytics, machine learning, and artificial intelligence. This makes it a one-stop shop for businesses of all sizes.
• Competitive pricing:  Alibaba Cloud’s pricing is generally competitive with other major cloud providers, such as AWS and Azure. In some cases, Alibaba Cloud’s services are even cheaper.
• Strong presence in Asia:  Alibaba Cloud has a strong presence in Asia, with data centers in over 20 countries and regions. This makes it a good choice for businesses that need to host their applications and data in Asia.
• Security and compliance:  Alibaba Cloud offers a variety of security and compliance features, including data encryption, access control, and intrusion detection. It is also certified with a number of industry standards, such as PCI DSS and HIPAA.
• Limited global reach:  Compared to AWS and Azure, Alibaba Cloud has a smaller global reach. It has fewer data centers in North America and Europe.
• Not as well-known:  Alibaba Cloud is not as well-known as AWS and Azure, especially outside of Asia. This can make it difficult to find qualified Alibaba Cloud professionals.
• Complex user interface:  Alibaba Cloud’s user interface can be complex and difficult to navigate, especially for users who are new to cloud computing.

Overall, Alibaba Cloud is a good choice for businesses of all sizes that are looking for a cloud provider with a wide range of services, competitive pricing, and a strong presence in Asia. However, businesses should be aware of Alibaba Cloud’s limited global reach, its smaller user base, and its complex user interface.

What Features Does Alibaba Cloud Have?

Alibaba Cloud is one of the top providers. Like the other top providers, it offers a range of cloud infrastructure and application development services. This section gives you an overview of the Alibaba cloud offerings for compute, storage, database, and networking so that you can get to know some of the services that the provider offers, and consequently, its pricing structures.

Companies face a big challenge when they move data from a physical service to the cloud, switch to a new cloud provider, or move deployment to a new region. The Data Migration service from Alibaba Cloud gives users access to a wide range of services and tools that will help them move without any problems. Users can move their own data by following their available, step-by-step guides, or they can hire Alibaba Cloud’s Migration Service or one of their partners to do it for them.

With Alibaba Cloud, you are consulted on the pros and cons and can be assisted with coming up with a solution that will not only meet your current needs but also expectations on how you will use resources in the future through capacity evaluation planning and setting up a distributed cloud architecture design that will ensure high service availability.

Alibaba Cloud’s web hosting services pricing plans come with support for a number of well-known content management systems, like WordPress and Joomla! These plans are perfect for small and medium-sized businesses (SMEs).

Alibaba Cloud will help you build and maintain your website. This includes choosing a domain name and a configuration that gives your website the amount of web space, concurrent connections, and monthly data transfer that it needs. Then, you can use Alibaba Cloud’s graphical control panel to add domains, manage files, and analyze traffic. The firm’s web hosting is fast and safe because it uses container technology and Elastic Compute Service. Alibaba Cloud’s Web Application Firewall also offers great protection, which has a 99.999% data reliability rate.

The power of the Internet of Things (IoT), which will affect our lives more and more in the future as more and more things we use become connected to the internet. When working with the Internet of Things, your platforms for smart technologies must be both reliable and affordable. Because of this technology, it is now possible to build automated solutions that can collect, process, evaluate, and act on data made by connected devices without the need for a separate infrastructure.

Alibaba Cloud’s suite for the Internet of Things (IoT) can handle a lot of traffic, which makes it easy to handle requests for access. It also has secure transmission, device rights management, and a reliable message service, and its equipment certification makes sure that each connected device is certified.

Elastic Compute Solution (ECS) by Alibaba Cloud is an online computing service that gives you secure and flexible virtual cloud servers for all of your cloud hosting needs. As your business grows, you can always add more disk space and bandwidth, or you can free up resources to save money. With 99.999999999% data reliability and the latest Intel CPUs, the software has been updated to work faster. And there are several things to talk about with regards to Alibaba Cloud’s ECS.

Function Compute is Alibaba Cloud’s most popular serverless pricing solution. It gives developers a fully hosted environment where they don’t have to worry about infrastructure like servers, so they can focus on writing and publishing code. It handles load balancing, auto scaling, and the distribution of resources. You can also set up event sources from other Alibaba services to run your code automatically. Users only pay for the resources that your code uses, down to the nearest 100 milliseconds.

Simple Application Server is a server-based tool that helps you build, manage, and keep an eye on your website quickly. If all you need is a private virtual machine, it’s much easier to set up private services, and it’s also the best way for people who are new to cloud computing to get started.

Server Load Balancer lets customers handle sudden spikes in traffic, shorten response times, and, most importantly, make sure that web applications are available 99.9% of the time. The Server Load Balancer checks on the health of the servers and intelligently sends application requests to servers in multiple zones that can handle them best. This makes sure that the servers are always available.

Alibaba Cloud Object Storage Solution (OSS) is a simple cloud storage service that lets you store, back up, and archive huge amounts of data. OSS is a central place where files are kept and can be accessed safely from anywhere in the world. The service has an uptime of up to 99.9% and works well for teams all over the world and international project management.

OSS is free, and you don’t have to commit to it for a long time. Users will only pay for the amount of storage space, network traffic, and requests they make. OSS also has no data storage limitations.

Express Connect is a set of easy-to-use and effective network services from Alibaba Cloud that let different network environments talk to each other directly. This means that customers can enjoy low network latency and high bandwidth communication even when the connected sites are far apart. This works very well for multimedia systems, which need low latency more than anything else. It also works well for hybrid systems, which need private connections between on-premise infrastructure, cloud technologies, and third-party cloud service providers.

Alibaba Cloud is committed to meeting the strictest standards, such as Germany’s C5 standard, the PCI DSS for payments, HIPAA for healthcare, and the EU GDPR for data protection and privacy.

The PWC Global Consumer Insights Survey found that trust is a big part of how people think about security risks online. More than one-third of the people surveyed said that “trust in a brand” is one of the top three reasons they shop at a certain store. This shows that businesses need to be able to trust their customers. Because of this, it is very important for companies of any size to choose a cloud provider that is both reliable and safe. This will make transactions easier and give clients peace of mind.

Alibaba Cloud’s Anti-DDoS Basic is a cloud-based security solution that works with ECS to protect your data and applications from DDoS attacks. Customers of Alibaba Cloud can use this service at no extra cost, and it is available to them.

Alibaba Cloud also includes Web Application Firewall (WAF), a cloud firewall service that protects against SQL injections, XSS, Malicious BOT, command execution vulnerabilities, and other common web attacks. This protects the security and availability of your website and keeps the core data of your users safe.

A Breakdown of Alibaba Cloud Pricing Packages

There are two ways to use Alibaba: with a subscription or by paying as you go. It also gives you a chance to try it out for free. If you want more specific pricing information, you should contact Alibaba Cloud directly. This section is only meant to give you a general idea of how much Alibaba Cloud costs.

By using the pay-as-you-go pricing option from Alibaba Cloud, you can get the flexibility you need while only paying for what you really use. There is no need to pay anything ahead of time.

The companies also offer ways to save money, such as by paying for a monthly subscription. When you don’t need a lot of flexibility, you can choose to pay less for your regular services. There are also resource packages that give you more freedom and help you save money. If you buy a resource plan, you may be able to get a discount on your next bill.

The ways you can pay for things on Alibaba Cloud are flexible, so you can choose the one that works best for you. Payments can be taken either when you sign up for resources or when your pay-as-you-go bill is made. Both of these possibilities are good ones.

Also, there are things called “extended grace periods” that give people more time. If you fill out Alibaba Cloud’s corporate qualification evaluation, you might be able to get longer grace periods for the monthly payments you make.

There is also the option of bank transfer, which is great for customers who are running businesses. Alibaba Cloud gives customers-only access to accounts through their platform and handles all payments for these accounts.

You can also pay for their services via Paypal, Visa and others.

Alibaba Cloud also offers flexible support plans with adequate, suitable pricing.

The Basic Plan, which is also free, includes all of Alibaba Cloud’s services and is available to everyone. After you buy the Developer support plan, $19.99 will be taken out of your account right away. This is how the Developer Plan works. You can choose to have your subscription automatically renewed if you want to. Your use of cloud services will be used as a benchmark to figure out the costs of the Business support plan. You can choose to have your subscription automatically renewed if you want to. Also, the price of the Enterprise support plan will depend on how many cloud products you use.

Contacting Alibaba Cloud directly will let you find out more about each support package.

Alibaba Cloud also has a pricing calculator that can help you estimate and calculate the cost of the infrastructure configurations you use with Alibaba Cloud.

You can get clear pricing information for this tool before you log in, and this information is based on your specific needs.

Alibaba Cloud VPS pricing is based on the following factors:

• Region:  The region where your VPS is located. Alibaba Cloud has regions all over the world, and the price of VPS varies depending on the region.
• Instance type:  The type of VPS instance you choose. Alibaba Cloud offers a variety of VPS instance types, each with different specifications and pricing.
• Bandwidth:  The amount of bandwidth your VPS needs. Alibaba Cloud offers a variety of bandwidth options, and the price of bandwidth varies depending on the amount you choose.
• Storage:  The amount of storage your VPS needs. Alibaba Cloud offers a variety of storage options, and the price of storage varies depending on the amount you choose.

Alibaba Cloud VPS pricing is generally very competitive, and Alibaba Cloud often offers discounts and promotions.

The cheapest Alibaba Cloud VPS pricing is in the Singapore region. So you can use some tools to change your IP to Singapore to buy it.

Here is a sample of Alibaba Cloud VPS pricing for the Singapore region:

You can use the Alibaba Cloud pricing calculator to get a more accurate estimate of the cost of your VPS. Please note that these prices are subject to change at any time.

Alibaba Cloud has been growing at an extraordinary rate, and the company keeps adding to and improving its already great products and services. They are working hard to learn how to serve markets outside of China. For example, they provide billing support (all in USD) in 168 countries and regions and design custom services for overseas markets instead of just internationalizing products for the Chinese market. 

If you want to do business in Asia, it should be clear that you should go with Alibaba Cloud and its flexible pricing structures. On the other hand, 1Byte has a lot of great stuff to offer if you’re willing to settle for a cheaper and newer option. If you have a project in mind for which you think our help would be helpful, please don’t be afraid to get in touch with us.

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Alibaba to spin off its cloud, AI and business messenger unit

Seven weeks after Alibaba announced its historic restructuring plan to split itself into six independent companies , the juggernaut is gearing up to spin off its cloud intelligence group.

Alibaba went public in New York back in 2014, marking the largest IPO at the time . Not long after Hong Kong relaxed rules around dual-class structures, which allow founders to retain certain control while opening the company to outside investment, in 2019, Alibaba sought a secondary listing in the city. Rising tensions between the U.S. and China also prompted many Chinese companies to retreat from the Nasdaq and NYSE in recent years.

“We are taking concrete steps towards unlocking value from our businesses and are pleased to announce that our board has approved a full spin-off of the Cloud Intelligence Group via a stock dividend distribution to shareholders, with intention for it to become an independent publicly listed company,” Daniel Zhang, chairman and chief executive officer of Alibaba Group, announced in the firm’s earnings report today. Zhang is also one of the cloud arm’s board of directors.

Alibaba aims to complete the spinoff in the next 12 months and plans to include external strategic investors in the group through private financings.

The cloud business generated $2.7 billion in revenue during the first quarter, making up 9% of Alibaba’s total revenues. (My colleague Alex has a financial deep dive into the cloud spinout. Stay tuned for the story.)

Marrying AI and cloud

You might not be familiar with Alibaba’s cloud intelligence group, but think of its main product lines roughly as “AWS+Slack+OpenAI”.

Its cloud business Alibaba Cloud dominates China’s market. Globally, Alibaba Cloud was the third largest infrastructure-as-a-service (IaaS) public cloud provider in 2021, according to market research firm Gartner . Add platform-as-a-service (PaaS) and private cloud to the mix, Alibaba came in fourth in Q4 2021, according to another market insight firm Synergy Research Group .

Alibaba’s Dingtalk, an enterprise chat app and productivity platform, surpassed 600 million users as of Q3 2022, with 15 million paid daily active users and 23 million enterprise users, the company said previously.

Tongyi Qianwen, Alibaba’s flagship large language model, is currently nowhere near GPT-3’s technological prowess and influence, but it’s one of China’s most promising alternatives to the text-generating AI. It also has the advantage of being applied to an array of Alibaba products. In fact, the integration has started , first with a copilot for Dingtalk.

It makes sense that Alibaba is grouping its cloud business and AI research team under one umbrella as these two go hand in hand. With each new breakthrough in AI, the amount of computational power needed to train data increases exponentially — so does the cost.

Interestingly, Alibaba mentioned in its quarterly report that it’s working to make cloud computing “more accessible and affordable.”

“We announced a new instance family that provides the same level of stability and offers up to 40% cost savings. For existing products, we reduced the prices of some of our core utility products, including computing, storage, networking and security products, by up to 50%,” the company said.

The timing seems apt. Earlier this week, Beijing unveiled a draft policy calling on cloud providers to work more closely with AI firms and support them with all the computing resources they need.

“We believe these moves will help our customers increase public cloud adoption in China as well as unlock emerging opportunities to leverage AI technology for enterprises,” Alibaba said.

Beijing calls on cloud providers to support AI firms

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Alibaba leverages cloud business to become a leading AI investor in China

Alibaba has been leveraging its vast cloud computing infrastructure to become a leading investor in China’s generative artificial intelligence start-ups, offering them credits to use the scarce network resources needed to train models rather than conventional cash-for-equity funding.

The Chinese ecommerce giant is trying to replicate the success of Microsoft’s investment in the US leader, OpenAI, by taking stakes in prominent start-ups Moonshot, Zhipu, MiniMax and 01.ai. They have all been developing local versions of US applications such as OpenAI’s ChatGPT and Character.ai’s avatar chatbot.

In one example, Ali Baba led a $1bn fundraising round in Moonshot AI that valued the start-up at $2.5bn in February. It put $800mn into the developer of the fast-growing Kimi AI chatbot, with just under half coming in the form of cloud computing credits, according to two people familiar with the deal. Alibaba declined to comment.

Over the past year, Alibaba chief executive Eddie Yongming Wu has personally overseen investments in the four leading AI start-ups, according to people familiar with the matter, as the company seeks to reinvent itself as an AI innovator.

The splurge in investment comes at a pivotal time for Alibaba. It is trying to chart a new path as it grapples with rising competition from ByteDance and PDD Holdings in its core ecommerce market and after the chaotic unwinding of its ambitious restructuring plan, under which its cloud business was supposed to pursue an initial public offering.

Alibaba cancelled that plan in November, citing the impact of US chip restrictions. Wu then took direct control of the cloud business, pledging to invest in AI and putting the business at the centre of his strategy to boost growth.

The cloud arm had been averaging single-digit quarterly growth since 2022, following Beijing’s crackdown on large internet companies. Its profitability has lagged far behind that of US rivals such as AWS.

Charlie Dai, vice-president and principal analyst at tech consultancy Forrester, said Alibaba was “facilitating the start-ups by offering a public cloud platform with comprehensive capabilities boosted by its broad ecosystem for their open-source models” while generating new revenue for its cloud business by providing computing resources to train their models.

The structure of Alibaba’s investment in Moonshot echoes those of Microsoft and Amazon, under which cash is transferred to AI start-ups on the agreement that they will use the money to train and run models on Azure and AWS servers, respectively.

However, as one person noted, the difference with Alibaba’s investment is that the money is never transferred to the Chinese start-ups. Instead, it is held in an escrow account that the company can count as incoming revenue.

Computing-for-equity offers are more enticing in China where cloud resources are scarce due to US restrictions on the export of advanced chips. “Providing compute is actually more valuable than cash,” said one Chinese AI scientist. “With the shortage of semiconductors, it’s very hard to get access to a 10,000 GPU (processing) cluster, which Alibaba has.”

Social media group Xiaohongshu is pursuing an even more creative investment method, offering increased traffic for the start-ups’ products through promotiona on its popular Instagram-like platform in exchange for equity, according to two people with knowledge of the matter. Xiaohongshu did not respond to a request for comment.

China’s major internet companies, including Alibaba, Meituan, Xiaohongshu and Tencent, are playing an outsized role in financing this wave of start-ups compared with the previous crop of AI start-ups dominated by surveillance groups SenseTime and Megvii.

During that phase of the investment wave, which peaked between 2017 and 2019, large tech investors such as Tiger Global and SoftBank, along with a wide pool of domestic venture capital firms, competed with the internet giants for deals.

But deteriorating relations between Beijing and Washington and a downturn in China’s VC industry over the past two years have made today’s crop of AI start-ups more reliant on financing from domestic internet companies, which in turn means they have less negotiating power when determining the price for cloud services, said one person with knowledge of the deals.

Alibaba has become a top investor just as it seeks to monetise its hoard of AI chips. Alibaba Cloud purchased high-end Nvidia graphics processing units, including large orders of the watered-down A800 and H800s series, before the US restricted advanced chip sales to Chinese companies. It has them in data centres in China and south-east Asia, according to a person familiar with the matter.

The cloud provider is seeking to capitalise on these chips before they lose their value when Nvidia releases its next generation of AI processors. Alibaba will be barred from buying the new chips under Washington’s tightened export controls, said one person close to the company.

Wu’s focus on AI investments represents a new chapter for Alibaba after a regulatory crackdown on its alleged monopolistic behaviour starting in 2021 required it to divest stakes in other internet companies under pressure from regulators.

Alibaba has become such a pivotal backer of AI start-ups in China that industry insiders have started to joke: “If you want to invest in China AI, just buy Alibaba stock. It’s a China AI ETF,” said one manager at an Alibaba-backed AI start-up.

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Alibaba Initiates Cloud Business Overhaul After Abandoning Spinoff Plans

A libaba Group Holding Ltd has embarked on a significant transformation of its cloud business, appointing new leaders to drive growth and capitalize on the burgeoning AI sector. This strategic move comes after the company canceled the much-anticipated spinoff of its $11 billion cloud unit, signaling its commitment to revitalizing the cloud division.

Alibaba has made key appointments to lead major business segments within Alibaba Cloud Intelligence, positioning itself to regain market share from state-backed competitors. Two of the newly appointed executives will report directly to Chief Executive Officer Eddie Wu, marking a pivotal shift in leadership dynamics.

Focus on the public cloud segment

A primary focus of this restructuring is the “public cloud,” Alibaba Cloud Intelligence’s domestic cloud services arm tailored for enterprise customers in China. Liu Weiguang, a seasoned professional in the industry, will oversee this segment. This strategic move aims to enhance Alibaba’s competitiveness and strengthen its presence in the Chinese enterprise cloud market.

Reversal of cloud spinoff plans

This overhaul follows Alibaba’s surprising decision to cancel the planned spinoff and listing of its Cloud Intelligence business. The cancellation led to a substantial $24 billion selloff over two days, disappointing investors. The company’s leadership is determined to address its cloud division’s challenges and steer it towards a new growth trajectory.

Management turmoil and leadership clarity

Alibaba Cloud has endured a year of management turbulence, beginning with the departure of former president Jeff Zhang in 2022. Since then, the cloud division has operated without a long-term CEO. Daniel Zhang briefly assumed business leadership after stepping down as Alibaba’s group CEO in June, only to resign approximately three months later. The latest restructuring aims to clarify leadership roles within the cloud unit.

Apart from Liu Weiguang, two other senior managers have been appointed to oversee smaller divisions within the cloud business—hybrid cloud services and cloud infrastructure. These leaders, all veterans in the field, will collectively manage a significant portion of the Chinese cloud market. The reorganization aims to streamline operations, enhance customer service, and drive innovation.

Alibaba’s AI ambitions

The cloud division is pivotal to Alibaba’s ambitious artificial intelligence (AI) initiatives. The company has introduced its large language model, Tongyi Qianwen, and invested in promising startups like Zhipu AI and Baichuan. Chairman Joseph Tsai recently highlighted that Alibaba Cloud hosts half of China’s generative AI firms and serves approximately 80% of the country’s technology companies. The cloud unit’s continued growth is integral to Alibaba’s AI-driven future.

Anticipating broader restructuring

The recent appointments may signal the beginning of a more extensive restructuring effort at Alibaba following the unexpected cancellation of the cloud spinoff. This decision has raised questions about the future of the iconic Chinese tech giant, which had previously outlined a comprehensive overhaul to reinvigorate its operations amid a broader tech-sector crackdown. Additionally, the cloud arm experienced a slowdown in topline growth as competitors like China Telecom Corp lured away business customers in recent years.

Alibaba’s decision to overhaul its cloud business signifies a commitment to its long-term vision and competitive strength in the AI and cloud sectors. With a renewed leadership structure and a focus on enhancing services, Alibaba aims to recapture its dominant position in the Chinese enterprise cloud market. The cloud division’s success will be crucial in shaping Alibaba’s future as a tech industry leader.

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Alibaba eyes a future with AI and cloud as dual growth engines

Alibaba Group has unveiled plans to widen its cloud footprint with new data centers in key Asian markets, and has earmarked artificial intelligence (AI) as a growth driver.

"Over the next decade, no industry will be spared the disruption brought about by AI," Alibaba Chairman Joe Tsai and Alibaba CEO Eddie Wu noted in a joint letter to shareholders following the group's  fiscal 2024 results . The company reported an 8% year-on-year increase in revenue to 941.17 billion yuan ($130.35 billion) for the year ended March 31, on a net income of 71.33 billion yuan ($9.88 billion), up 9% from the previous year.

Also: AI could help soften cloud sticker shock - or make things worse

With AI driving change globally, Alibaba will be looking to the technology for growth across its businesses, each of which will have use cases to offer, wrote Tsai and Wu in their shareholder memo. 

Pointing to AI as "the single most powerful element that will change and accelerate the growth of our businesses," they added that AI deployment will fuel demand for computing and, in turn, growth for the company's cloud business. 

"AI will not be a threat, but will herald in massive opportunities as the driver for breakthrough user experience and business models," they wrote. "If we don't keep up with the constant and marvelous improvements that AI is showing us on a daily basis, we will be displaced."

Alibaba is looking to do so through varying investment goals for its operations, including e-commerce, which is one of its two core businesses -- alongside the cloud -- and encompasses Taobao and Tmall Group and Alibaba International Digital Commerce Group. The latter remains nascent and needs upfront investment, while Taobao and Tmall Group is a more mature business and will need to innovate fast, according to the senior executives.

With the cloud, Alibaba is targeting to be China's leading public cloud infrastructure provider, offering a range of services spanning elastic computing, security, and AI. This focus on the public cloud will require forgoing short-term revenue from projects that yield low margins, they noted.

The Chinese tech giant, however, will be looking to expand its data center footprint globally, with new sites planned for key markets.

Also: How Alibaba's generative AI testing seeks to empower smaller e-commerce sellers

In particular, Alibaba Cloud will launch its first cloud region in Mexico and add data centers in South Korea, Malaysia, Thailand, and the Philippines over the next three years. These investments in international markets are part of Alibaba's efforts to boost its global cloud and AI offerings, the company said in a statement on Friday.

Alibaba added that its generative AI development platform, Model Studio, will be available soon for international customers via its availability zones in Singapore. This will provide access to Alibaba's large language model Tongyi Qianwen (Qwen).

Alibaba in March called off IPO plans for its logistics unit Cainiao, citing uncertain market conditions. The move followed its decision last November to backtrack on its  plan to spin off its cloud business , with Wu pointing to growing US restrictions on chip sales to China as the reason for the detour.

Wu also noted the value of keeping its cloud competencies alongside the development of AI. "The deep convergence and flywheel effect of AI [plus] cloud computing will be an important impetus and advantage for our future development," he said .

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Alibaba Business Model | How Does Alibaba Make Money?

When it comes to online marketplace, the first name that comes to your mind is Amazon. Amazon surely is a big e-commerce company, but there is another upcoming e-commerce company that is about to (and has already started to) take over the internet marketplace. It is a China-based company whose founder was rejected by KFC. He is now the richest man in China. This e-commerce giant is none other than Alibaba.

With one of the most successful business models in the world, this company is on to take on the online marketplace globally. But how does Alibaba make money? What is Alibaba’s business model? Let us understand more about the company before we move onto discuss Alibaba Business Model .

What is Alibaba?

Alibaba Group was founded by Jack Ma  along with 17 other co-founders in 1999 with the website Alibaba.com, a business-to-business portal with an aim to connect Chinese manufacturers with international buyers.

Today, Alibaba Group Holding Limited is one of the biggest companies in China that provides consumer-to-consumer, business-to-consumer and business-to-business sales and various other services via e-commerce web as well as offline portals. The major revenue earning services include electronic payment services, marketplace, and data-centric cloud computing.

The name Alibaba came from the character Ali Baba from the Persian literature One Thousand and One Nights because of its universal appeal. According to Jack:

People from India, people from Germany, people from Tokyo and China, they all knew about Alibaba. Alibaba – open sesame. Alibaba is a kind, smart business person, and he helped the village. So … easy to spell, and globally known. Alibaba opens sesame for small- to medium-sized companies.

Alibaba Business Model

Alibaba has come a long way since its beginning in 1999. As of April 2016, It is the world’s largest retailer surpassing Walmart, with operations in over 200 countries. But what exactly is Alibaba Business Model? How did it manage to gain such success? For that let us first understand how does Alibaba work and what all businesses does it own.

How Does Alibaba Work?

The business model of Alibaba is different from other players like eBay and Amazon . It focused more on trade between businesses. Unlike the usual business-to-consumer approach, Alibaba focuses on being a platform for suppliers to sell products in bulk at wholesale prices to small or medium-sized businesses worldwide, who then resell them for a profit in their domestic markets.

Although Alibaba focuses on business to business trade it also supports other trade through e-commerce web portals. Taobao is for consumers to trade, where as Tmall is for the upcoming middle class of China to purchase branded products. There are many other subsidiaries through which Alibaba makes money.

How Does Alibaba Make Money?

Alibaba’s Busines model is made up of three major web portals: Alibaba.com, Taobao, and Tmall. All of them serve to connect various types of buyers and sellers. However, there are 6 more subsidiaries of Alibaba which include Aliexpress, 1688, Alimama, Alibaba Cloud, Ant Financial, and Cainiao Network. All these subsidiaries are so well integrated that they make the Alibaba group a big ecosystem.

Alibaba Businesses & How Do They Make Money

Alibaba.com.

Alibaba.com is the world’s largest online wholesale marketplace for global trade. The website allows exporters in China as well as in other countries to connect with the buyers in over 200 countries. The buyers usually constitute trade agents, wholesalers, retailers, manufacturers, and SMEs engaged in the import and export business.

The company also offers other import /export supply chain services which include

• custom clearance,
• VAT refund,
• trade financing, and
• logistic services.

Sellers can list their products on the website for free. They also have the privilege to pay for certain extra features such as greater exposure on the site and unlimited product listings.

How does Alibaba make money?

Alibaba.com is a marketplace where sellers and buyers meet. The website acts as an intermediary which charges commissions from the sellers of mainland China, Hongkong & Taiwan. However, the revenue isn’t earned just as commissions.

Alibaba offers two types of supplier membership:

Free Supplier Membership

Suppliers on Alibaba do not need to pay anything to list their goods on the online marketplace . They are free to display up to 50 Products online and to get business inquiries. Alibaba only makes money from them in the form of commissions if the money is paid through Ali Pay and the seller is from mainland  China, Hongkong & Taiwan

Premium Gold Supplier Membership

There are limitations to being a free supplier member of Alibaba as these suppliers are not verified (reduces buyer’s trust) and are only able to display up to 50 products on the website. The suppliers from China can’t even list themselves as free suppliers and have to buy the premium gold supplier membership plan to start a business on Alibaba.com.

Alibaba Gold Supplier Membership is a premium membership where suppliers pay certain fees (few thousand dollars) to become a verified Gold Supplier.

All Gold Supplier members are required to fulfill necessary requirements for this highest level of membership. They are also required to undergo rigorous authentication and verification   procedure by third-party credit reporting agencies.

Gold members are also charged commissions as a percentage of the transaction value of goods sold.

Taobao means “search for treasure” in Chinese. It was launched on 10th May 2003 under the Alibaba group. This part of Alibaba’s business model facilitates (small) business to consumer and consumer to consumer trade by allowing small businesses and individual entrepreneurs to list their products on their website for sale.

Taobao, the biggest website of Alibaba, is so big and popular that it forced the market leader of the online marketplaces – eBay to shut its business in China in 2006. The website, today, is China’s largest shopping website. It is ranked the ninth most popular website in the world by Alexa.com. Taobao lists hundreds of millions of products and services from millions of sellers ( 400 million active users ).

How does Taobao make money?

There is no transaction fee to conduct trade on Taobao and the merchants can join the site for free.  The website functions just like Google which lists the result of the specific keywords and where merchants pay to stand out of all the other players through advertising and other marketing strategies. This was one of the reasons of Taobao’s high user base in China.

The site has a special rating system that reflects how many transactions each seller has successfully completed. Buyers can ask the merchants direct questions through Alibaba Group’s instant messenger software.

Taobao, in April 2008, introduced a new B2C platform called Taobao Mall to complement its C2C marketplace. The idea got a whole new identity when Tmall.com was launched in November 2010 and became an independent business in June 2011.

Tmall (Taobao Mall) offers the Chinese consumers a wide range of branded products, mainly for the upcoming middle class of the country. Taobao was more focused on small sellers and individual entrepreneurs, whereas Tmall takes on the responsibility of larger companies (Nike, Apple, etc).

Tmall hosts over 3700 product categories selling to over 500 million active users. The company’s operating model is similar to other well-known e-commerce websites such as Amazon and eBay.

Tmall grants its sellers access to analytic tools that show the number of visitors, page views, and customer ratings. This proves to be helpful to the companies to guide their business decisions.

How does Tmall make money?

Tmall, just like other e-commerce players, makes money through

• Commissions as a percentage of the price of good sold (it varies for different categories)
• Service fees (one time fixed security deposit and annual technology and service fee)
• Marketing services provided to the suppliers

Alimama is the biggest open marketing platform in China. It acts like the Adsense in China. This online advertise trade platform for both publisher and advertiser lets advertisers from purchase content-based PPC advertising plan or banner or text link based on cost per impression or cost per time. Simultaneously it helps publishers make money by placing advertisements in their content.

How does Alimama make money?

Just like other marketing platforms, Alimama makes money through advertisers and split the same with affiliate partners.

AliExpress is a global retail marketplace that enables consumers from around the world to buy directly from manufacturers and distributors in China. The difference between Taobao and AliExpress is that Taobao focuses on selling to the Chinese consumers, whereas AliExpress allows consumers from countries like Russia, USA, Spain, Brazil, France, UK, etc,  to shop directly from Chinese businesses.

How does Aliexpress make money?

Just like other e-commerce platforms of Alibaba, Aliexpress makes money by charging commissions as a percentage of the transaction value of goods sold. The commission range from 5% to 8% of the transaction value. However, Aliexpress also charges a fixed $1500 + store fee to start or change the store on the platform. This is done to help fight scammers and bad suppliers running away from their 1-star reviews.

Alipay is a third-party online payment platform to assist buyers with their transactions. It is an eWallet  platform just like Paytm in India  which helps shoppers store funds and use the stored funds securely with an ease to transact online and offline.

There are two ways for a shopper to make a payment using AliPay:

• The default option is for the shopper to use their mobile device (phone, tablet, and so on) to scan the QR code that appears on the Alipay payment page. This is the most popular payment method, used by the majority of shoppers.
• An alternative is for the shopper to log in to the Alipay payment page using their Alipay credentials.

How does AliPay make money?

It doesn’t charge any fee and works through an escrow service . That is, it invests the stored money in a partner bank at a predetermined rate and receives interest on the stored amount.

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1688.com was launched by Alibaba in 2010 primarily for targeting the wholesale business segment within China. The company reportedly hosts more than 500,000 quality suppliers offering over 150 million different types of products. 1688.com caters to individuals and businesses from all around the world and is today the number one website when looking for wholesalers and suppliers in China. Even many Taobao stores get their supplies from 1688.

Since 1688.com was established as a wholesale marketplace to cater users from China, the prices on the website are very low which attract a lot of customers all over the world.

How does 1688 make money?

Listing items on 1688.com is free. However, 1688 makes money from:

(i)  TrustPass membership plan fees. This lets sellers host premium storefronts with access to data-analytics applications and upgraded storefront management tools

(ii) Premium services, such as premium data analytics and online marketing services.

Alibaba Cloud

Alibaba Cloud began as a private cloud to serve the internal demands of Alibaba’s e-commerce businesses. It is a global cloud computing company that provides various cloud computing services: elastic computing, object storage, relational database, big data analysis, and artificial intelligence. It operates in eight geographical regions around the globe.

Ant Financial

Ant Financial is the most valuable fin-tech company in the world that brings inclusive financial services to the world. The company operates Alipay, the world’s largest mobile and online payments platform, Yu’e Bao, the world’s largest money-market fund, Ant Fortune, Zhima Credit and MYbank.

Cainiao Network

Cainiao Network is a Logistics data platform operator dedicated to meeting the current and future logistics demands of China’s online and mobile commerce sector. The company has taken a collaborative approach to logistics and aims to realize delivery anywhere in China within 24 hours, and across the globe within 72 hours.

Other businesses

Alibaba is also involved/have stakes in other businesses. Some of them are:

Sina Weibo : China’s version of Twitter,

Youku Tudou : similar to YouTube,

Aliwangwang : an instant messaging service,

Juhuasuan:  sales and marketing platform for flash sales for Taobao and Tmall.

Laiwang : a messaging application competing with WeChat.

To conclude

Alibaba is famous for its B2B website, Alibaba.com, that facilitates international trade in China and a few other Asian countries. However, it is not the sole reason for Alibaba’s success. It is really in the game because of its e-commerce within China: Taobao and Tmall. Sales on the Taobao marketplaces make up more than 80% of all online purchases in China. That’s huge.

Alibaba business model is really profitable and scalable and their momentum is ever increasing. They have the advantage for any upfront challenges in new markets.

Go On, Tell Us What You Think!

Did we miss something?  Come on! Tell us what you think about our article on  Alibaba Business Model | How Does Alibaba Make Money?  in  the comments section.

A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.

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Decoding LVMH’s partnership with Alibaba

By Gemma A Williams

This article on LVMH and Alibaba is part of our Vogue Business Membership package. To enjoy unlimited access to Member-only reporting and insights, our NFT Tracker, Beauty Trend Tracker and TikTok Trend Tracker, weekly Technology, Beauty and Sustainability Edits and exclusive event invitations, sign up for Membership here .

LVMH and Alibaba have cemented a deal that will help the luxury conglomerate increase its omnichannel, data and digital capabilities in China, while the tech giant will benefit from LVMH’s halo effect, signalling a buckling down in the region as sales continue to slump.

Through the partnership, LVMH has begun integrating Alibaba Cloud’s generative AI capabilities, including a comprehensive AI model-building platform called Model Studio (Bailian) and Qwen, its proprietary large language model (LLM), into its chat interfaces and wider clienteling experience and services.

“These AI [capabilities], which are similar to ChatGPT, can facilitate more customised recommendations alongside providing more digital assets that can enable consumers to have a richer shopping or brand experience,” explains Tom Nixon, co-founder of digital marketing agency Qumin.

LVMH first implemented Dataphin — Alibaba Cloud’s data management tool — in 2019 to deliver personalised services through a bespoke platform called LVMH Atom. The luxury group has also used Alibaba Cloud’s machine learning platform, known as PAI, to develop customised services for Chinese consumers across all its brands. Around 30 of its leather goods, jewellery and beauty brands already leverage Alibaba’s digital capabilities for live streaming, virtual try-on and 3D product display inside Alibaba’s Tmall Luxury Pavilion.

Qwen’s data analysis capabilities can potentially further enhance LVMH Atom to deliver personalised experiences and targeted promotions to the customer and valuable insights to LVMH. Aurelien Rigart, MD and co-founder of digital consultancy IT Consultis, says that this partnership means LVMH can change how it approaches content creation, such as adverts and physical displays, to customer service.

The five-year extension comes as little surprise given the current volatility in the Chinese market and soft Q1 earnings. LVMH reported in April that sales for the quarter rose 2 per cent, while Asia, excluding Japan, declined by 6 per cent. China’s luxury sector, worth RMB 816 billion ($115 billion) according to PWC , is a vital component of any C-suite’s long-term strategy, but it’s difficult for international brands to navigate. China is a highly specific, complex market with “a unique digital ecosystem and market dynamics”, says Rigart. “It’s shaped by dominating super-apps, complex local data regulations (i.e., China Personal Information Protection Law), and the Great Firewall,” he outlines.

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The country is the most advanced market in the world when it comes to digital penetration, agrees Luca Solca, senior analyst at Bernstein, responsible for global luxury goods. Having an on-the-ground partner has become a common strategy for international brands to get a leg up and a clearer understanding of their Chinese consumers. LVMH is no different. Alibaba is a safe bet as it’s a “dominant player” that can provide “very high service levels”, Solca says.

Amid fierce recent competition from tech companies like Pinduoduo and JD.com, Alibaba has increased investment in Alibaba Cloud infrastructure; the company said this has led to double-digit growth across key metrics including GMV.

“The luxury market is very competitive and demands that players stay on top of new fronts that are opening up — we are seeing rising complexity and accelerating tempo in competitive dynamics,” Solca adds. He estimates that digital sales for LVMH in Fashion and Leather Goods were approximately 9 per cent — “China would be comfortably in the teens,” according to Bernstein’s understanding. “By integrating more AI into their operations, [LVMH] can aim to achieve their goal of stronger omnichannel capabilities in the coming years,” Rigart says.

This ongoing partnership is also about “crafting digital journeys for customers — not selling handbags”, Nixon says. Three of LVMH’s most well-known jewellery labels have already elevated their experience on the Tmall Luxury Pavilion. Tiffany, Bulgari and Chaumet were the first to launch virtual flagship stores using the platform’s Luxury Stage model — a highly customisable digital arena that allows brands to build next-gen Tmall stores. Chaumet collaborated with Tmall’s 88VIP loyalty programme in March to provide exclusive offline jewellery experiences to a selection of its VIP clients. Such features support LVMH brands with their ultimate aim of “putting the right product at the right place at the right moment to reach the right customers”, Gonzague de Pirey, chief omnichannel and data officer at LVMH, told Alibaba’s news outlet Alizila recently.

Nixon cites a broader shift in luxury globally towards more immersive storytelling in longer-form content, such as film, as well as a move away from high tech towards wellness and connectedness to tangible emotions and experience. Here, “data is fundamental” in understanding and predicting these consumer shifts. In simple terms, Alibaba’s AI and cloud capabilities make sense of the mammoth data points that LVMH can funnel from CRMs in stores.

“Digital experiences have the risk of not creating that human authenticity so I think that will be where it will ensure things like movies and new experiential spaces engage people emotionally but with the data hidden away,” he explains.

The use of LLMs and AI capabilities will not only “personalise and elevate” the luxury shopping experience but also “drive operational efficiencies”, notes China marketing consultant Amber Wu — ultimately facilitating sales. AI is already being used to streamline supply chain management, ensuring that inventory is managed efficiently, thus reducing overproduction and ensuring products are available when and where customers want them —again reinforcing LVMH’s mantra. Franck le Moal, group IT director and CIO of LVMH, told Alizila in November 2023 that the group is already using data from the supply chain and from various markets in order to “finetune the level of products it needs to produce” in multiple use cases such as in fashion, wine and spirits, and fragrance.

According to Alizila , data-driven insights on and off the platform allow LVMH to gauge how new products will stir consumer interest. In an interview, de Pirey said it was “thanks to data and AI” that the company has “more accurate forecasting”. He estimates that using AI increases accuracy up to 10 times along the supply chain.

“For LVMH, it can [help them to] predict which city or area has the customers that want which items most or least and even pinpoint the peak time,” Wu predicts.

Going beyond China, the LVMH Group considers Alibaba Cloud a “global partner”, a spokesperson tells Vogue Business . “The capability for Alibaba Cloud to act locally but also to act globally is destined to help us unleash more potential in global markets,” they state. Alibaba’s data bank includes information from Alipay and the capture of travel behaviours through Fliggy, the company’s online travel platform. “Understanding the global Chinese consumer — not only within China — gives you a competitive advantage. That is pretty powerful,” Nixon concludes. Especially with the upcoming Olympic Games on the horizon.

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LVMH redefines Luxury Retail Experience in China with a new extended partnership with Alibaba

· May 22, 2024

© Marie Flament

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Lvmh redefines luxury retail experience in china with a new extended partnership with alibaba - lvmh.

LVMH Group, the world leader in high-quality products, and Alibaba Group, the leading e-commerce and technology company in China, today announced an extended partnership to push further the boundary of luxury experience in China, leveraging Alibaba’s cloud technologies, through AI-powered innovations in retail and on-line with Tmall. 

The deepened partnership is a strong commitment to the shared dedication of the two companies to pioneering retail innovation and delivering exceptional, tech-driven luxury experiences, that will enable LVMH to increase its Omnichannel, Data and Tech presence in China.

Stephane Bianchi, Group Managing Director of LVMH, said: “Alibaba is already a key partner for our Maisons and for the Group. The reinforcement of our partnership will help us to further accelerate our omni-channel business growth, and to keep on leveraging the transformative capabilities of cloud and AI technologies, along with Alibaba’s world-leading expertise in ecommerce operations. Our forward-looking collaboration will deliver unparalleled experiences to our clients throughout their high-end shopping journey.”

Eddie Wu, Chief Executive Officer of Alibaba Group, added: “Alibaba is pleased to enable a transformation of the high-end consumption experience with retail leaders like LVMH through our world-class technologies in cloud computing and AI. This comprehensive partnership has elevated the retail experience for LVMH’s customers worldwide, including China-based consumers on Tmall. We look forward to continuing to build on the strong partnership and innovation journey with LVMH.”

In its pursuit of relentless innovation, LVMH has begun integrating Alibaba Cloud’s generative AI capabilities, including Qwen, Alibaba’s proprietary large language model, and Model Studio (Bailian), a comprehensive AI model building platform. This integration has paved the way for the creation of novel applications and services that underscore the luxury Maison’s commitment to staying at the forefront of innovation, harnessing cutting-edge technology to elevate its luxury offerings for global consumers, and fostering innovation-led growth within its global retail businesses.

With more than 30 Maisons and Divisions within mainland China and Southeast Asia (including Sephora APAC and DFS), this extension plan of the cooperation for another five years reflects a strong and shared commitment to explore new markets, products, and technological frontiers. Moving forward, LVMH will get access to a broader array of Alibaba Cloud’s leading technologies and proven products to further optimize its business operations, enhance customer insights, and streamline its supply chain management processes to address Chinese market.

The strategic partnership between the two industry titans was initiated in 2019. Since then, LVMH has implemented Alibaba Cloud’s data management tool, Dataphin, to power “LVMH ATOM” China—a bespoke platform designed by LVMH to deliver personalized services tailored to its expanding Chinese customer base. Furthermore, LVMH has leveraged Alibaba Cloud’s machine learning platform, PAI, to develop customized services that cater to the distinct tastes of Chinese consumers across all its brands.

This announcement of extending the global partnership follows the debut of integrating Tmall in Tiffany’s and Chaumet’s luxury retail journey. To date, LVMH has successfully introduced around 30 prestigious Maisons who are partnering with Tmall Luxury Pavilion to leverage Alibaba’s digital capabilities for engaging experiences such as 3D product displays, virtual try-on, and livestreaming. Both parties have also expanded the collaboration on various omni-retail initiatives, including digital recreation of renowned luxury venues, product debuts, membership programs, and personalized consultations. This strategic move further extends the LVMH luxury experience to millions of Chinese shoppers.

About Alibaba Group 

Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a good company that lasts for 102 years.

About Alibaba Cloud  

Established in 2009, Alibaba Cloud (www.alibabacloud.com) is the digital technology and intelligence backbone of Alibaba Group. It offers a complete suite of cloud services to customers worldwide, including elastic computing, database, storage, network virtualization services, large-scale computing, security, management and application services, big data analytics, a machine learning platform and IoT services. Alibaba maintained its position as the third leading public cloud IaaS service provider globally since 2018, according to IDC. Alibaba is the world’s third leading and Asia Pacific’s leading IaaS provider by revenue in U.S. dollars since 2018, according to Gartner.

About Tmall Luxury Pavilion 

Launched in 2017, Tmall Luxury Pavilion is China’s top online destination in for luxury shopping. It hosts hundreds of leading luxury and premium brands worldwide, spanning apparel, cosmetics, jewelry and watches and home.

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Paris, May 22 nd , 2024 - LVMH Group, the world leader in high-quality products, and Alibaba Group, the leading e-commerce and technology company in China, today announced an extended partnership to push further the boundary of luxury experience in China, leveraging Alibaba’s cloud technologies, through AI-powered innovations in retail and on-line with Tmall.

The deepened partnership is a strong commitment to the shared dedication of the two companies to pioneering retail innovation and delivering exceptional, tech-driven luxury experiences, that will enable LVMH to increase its Omnichannel, Data and Tech presence in China.

Stephane Bianchi, Group Managing Director of LVMH, said : “Alibaba is already a key partner for our Maisons and for the Group. The reinforcement of our partnership will help us to further accelerate our omni-channel business growth, and to keep on leveraging the transformative capabilities of cloud and AI technologies, along with Alibaba’s world-leading expertise in ecommerce operations. Our forward-looking collaboration will deliver unparalleled experiences to our clients throughout their high-end shopping journey.”

Eddie Wu, Chief Executive Officer of Alibaba Group, added: “ Alibaba is pleased to enable a transformation of the high-end consumption experience with retail leaders like LVMH through our world-class technologies in cloud computing and AI. This comprehensive partnership has elevated the retail experience for LVMH’s customers worldwide, including China-based consumers on Tmall . We look forward to continuing to build on the strong partnership and innovation journey with LVMH.”

In its pursuit of relentless innovation, LVMH has begun integrating Alibaba Cloud's generative AI capabilities, including Qwen, Alibaba’s proprietary large language model, and Model Studio (Bailian), a comprehensive AI model building platform . This integration has paved the way for the creation of novel applications and services that underscore the luxury Maison’s commitment to staying at the forefront of innovation, harnessing cutting-edge technology to elevate its luxury offerings for global consumers, and fostering innovation-led growth within its global retail businesses.

With more than 30 Maisons and Divisions within mainland China and Southeast Asia (including Sephora APAC and DFS), this extension plan of the cooperation for another five years reflects a strong and shared commitment to explore new markets, products, and technological frontiers. Moving forward, LVMH will get access to a broader array of Alibaba Cloud's leading technologies and proven products to further optimize its business operations, enhance customer insights, and streamline its supply chain management processes to address Chinese market.

The strategic partnership between the two industry titans was initiated in 2019. Since then, LVMH has implemented Alibaba Cloud’s data management tool, Dataphin, to power “LVMH ATOM” China—a bespoke platform designed by LVMH to deliver personalized services tailored to its expanding Chinese customer base. Furthermore, LVMH has leveraged Alibaba Cloud’s machine learning platform, PAI, to develop customized services that cater to the distinct tastes of Chinese consumers across all its brands.

This announcement of extending the global partnership follows the debut of integratin g Tmall in Tiffany’s and Chaumet’s luxury retail journey. To date, LVMH has successfully introduced around 30 prestigious Maisons who are partnering with Tmall Luxury Pavilion to leverage Alibaba's digital capabilities for engaging experiences such as 3D product displays, virtual try-on, and livestreaming. Both parties have also expanded the collaboration on various omni-retail initiatives, including digital recreation of renowned luxury venues, product debuts, membership programs, and personalized consultations. This strategic move further extends the LVMH luxury experience to millions of Chinese shoppers.

About Alibaba Group

Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a good company that lasts for 102 years.

About Alibaba Cloud

Established in 2009, Alibaba Cloud (www.alibabacloud.com) is the digital technology and intelligence backbone of Alibaba Group. It offers a complete suite of cloud services to customers worldwide, including elastic computing, database, storage, network virtualization services, large-scale computing, security, management and application services, big data analytics, a machine learning platform and IoT services. Alibaba maintained its position as the third leading public cloud IaaS service provider globally since 2018, according to IDC. Alibaba is the world’s third leading and Asia Pacific’s leading IaaS provider by revenue in U.S. dollars since 2018, according to Gartner.

About Tmall Luxury Pavilion

Launched in 2017, Tmall Luxury Pavilion is China’s top online destination in for luxury shopping. It hosts hundreds of leading luxury and premium brands worldwide, spanning apparel, cosmetics, jewelry and watches and home.

LVMH Moët Hennessy Louis Vuitton is represented in Wines and Spirits by a portfolio of brands that includes Moët & Chandon, Dom Pérignon, Veuve Clicquot, Krug, Ruinart, Mercier, Château d’Yquem, Domaine du Clos des Lambrays, Château Cheval Blanc, Colgin Cellars, Hennessy, Glenmorangie, Ardbeg, Belvedere, Woodinville, Volcán de Mi Tierra, Chandon, Cloudy Bay, Terrazas de los Andes, Cheval des Andes, Newton, Bodega Numanthia, Ao Yun, Château d’Esclans , Château Galoupet, Joseph Phelps and Château Minuty. Its Fashion and Leather Goods division includes Louis Vuitton, Christian Dior, Celine, Loewe, Kenzo, Givenchy, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Loro Piana, RIMOWA, Patou, Barton Perreira and Vuarnet . LVMH is present in the Perfumes and Cosmetics sector with Parfums Christian Dior, Guerlain, Parfums Givenchy, Kenzo Parfums, Perfumes Loewe, Benefit Cosmetics, Make Up For Ever, Acqua di Parma, Fresh, Fenty Beauty by Rihanna, Maison Francis Kurkdjian and Officine Universelle Buly. LVMH's Watches and Jewelry division comprises Bulgari, Tiffany & Co., TAG Heuer, Chaumet, Zenith, Fred and Hublot. LVMH is also active in selective retailing as well as in other activities through DFS, Sephora, Le Bon Marché, La Samaritaine, Groupe Les Echos, Cova, Le Jardin d’Acclimatation, Royal Van Lent, Belmond and Cheval Blanc hotels.