HONG KONG — Alibaba founder Jack Ma warned that pure online retailers are becoming a “traditional” business and he anticipates “the birth of a reimagined retail industry” driven by an omnichannel experience.
“With e-commerce itself rapidly becoming a ‘traditional business,’ pure e-commerce players will soon face tremendous challenges,” Ma said in an annual letter to shareholders Thursday.
The Hangzhou-based Alibaba Group, which has expanded into everything from retail, financial services, entertainment, media, and healthcare, surpassed 3 trillion renminbi, or $424.09 billion, in gross merchandise value on its online marketplaces in March, which include Tmall and Taobao. The amount represents a tripling in three years and makes Alibaba Group the largest retail ecosystem in the world, the company said.
Alibaba has made its own investments in the brick-and-mortar retail industry over the past couple years. In 2015, the company invested $4.6 billion in electronics chain Suning Appliance Company Ltd. and in 2014 it invested $692 million in Chinese department store operator Intime Retail. An Alibaba spokeswoman declined to comment on Alibaba’s omnichannel retail strategy.
Ma also highlighted the breakneck growth pace of its mobile revenues. In the fiscal year prior to its IPO in September 2014, mobile revenue accounted for just a single-digit percentage of revenue from China retail marketplaces. In the most recent quarter, that jumped to more than 75 percent of total revenue.
“Our mobile monetization rate now exceeds that of the desktop, making Alibaba Group the largest mobile commerce company in the world,” Ma said. “We have more than 430 million annual active buyers, which means one out of every three individuals in China has made a purchase on our retail marketplaces.”
Echoing the importance of online and offline integration, chief executive officer Daniel Zhang in a separate letter said “the most important opportunity on the horizon is not growing online sales in isolation but rather helping traditional retailers upgrade into a brand new retail model.”
The company announced Monday it would hold its annual Singles’ Day shopping carnival countdown in the southern city of Shenzhen, which neighbors Hong Kong. It had enlisted producer David Hill, whose credits include the Superbowl, 88th Oscars and American Idol, to create the televised countdown gala event to be held on Nov. 11.