Tencent has announced a $500 million investment in Indonesia. These funds will cover the construction of its third data center in the region in a partnership with GoTo Group and Alibaba Group. But more investments are promising to arrive soon in this Southeast Asian country.

The Indonesian government wants companies doing business in Indonesia to invest sufficiently. If they do, they may be able to continue to offer some of their products or services. We have already seen this with the ban on iPhone 16 and Pixel sales for lacking the so-called National Component Level Certificate (TKDN).

Multiple media reports have reported that the announcement was made over the weekend during Indonesian President Prabowo Subianto's state visit to China. Tencent's $500 million is part of a foreign investment package that promises to exceed $10 billion. What will all this money be used for? To boost the cloud computing business.

The idea is that Southeast Asia's largest economy will be able to offer its companies and startups a more solid infrastructure for all kinds of cloud services, including artificial intelligence (AI). This is part of a program known as “Golden Indonesia 2045 Vision,” which seeks to consolidate the industry and services sectors in Indonesia for the country's 100th anniversary of independence.

GoTo partnership with Tencent 

GoTo, an Indonesian group, needs to lean on external partners on topics such as data analytics, artificial intelligence, cybersecurity, and cloud infrastructure. Chinese companies such as Alibaba and Tencent are expected to capitalize on this need. However, to operate in the country, they have to meet a number of strict requirements that translate into local investment, something that the Indonesian government is pursuing.

The data handled by GoTo and its partners must remain stored in Indonesia. As recently promised, the only way to guarantee this requirement for national data sovereignty is to install more data centers in the country. The government has also succeeded in concluding an agreement to train Indonesian workers on issues related to the “new global digital economy.”

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At least 95.8% of European consumers shopped online in the first quarter of this year. In the United Kingdom, that percentage was 93%. In the Netherlands, 96% of consumers shopped online. Specifically, the highest % of respondents who have made online purchases, 99%, were recorded among people between 35 and 44 years of age. In addition, this age group was the largest (25%) in the highest spending segment, which is between 351 to 583 euros. 

These data come from the recently published Consumer Insight Report from AliExpress. The online marketplace surveyed over 8,500 consumers from France, Germany, Spain, the United Kingdom, and the Netherlands about their online shopping habits in the first quarter of this year.

The survey also reveals that online marketplaces continue to be the preferred channel for shopping, with 53.5% of Spanish consumers stating that they have purchased from them. 

By region, consumers in the Canary Islands are the ones who have used marketplaces the most to make at least one purchase in the last quarter, with 60% doing so, followed by Andalusians with 59%.

UK consumers are the ‘big spenders’ 

According to the report, 63% of consumers in the United Kingdom spent an average of between 100 and 500 euros online during the first quarter. The remaining 37% spent less than 100 euros during that period. Regarding consumers in the Netherlands, 75% spent over 100 euros.

‘In the United Kingdom, millennials and Gen Z consumers spent the most on fashion online.’

Fashion was the most popular online shopping category. In the United Kingdom, Gen Z and millennials spent the most in this category. This insight shows that British consumers like to follow the latest fashion trends.

Most sold categories 

Among survey participants, the top-selling categories on AliExpress were:

• Clothing, underwear, pajamas and footwear: 83.5%.
• Home appliances and consumer electronics: 79.5%.
• Phones/telecommunications: 75.5%.
• Sports and entertainment: 52.5%.
• Beauty and health: 52%.

Gary Topp, European Sales Director at AliExpress, said: "The results of our latest Consumer Insight Report highlight the growing importance of e-commerce in the daily lives of European and Spanish consumers. As we head into the summer with many sporting events, we see more and more consumers buying products focused on sports and wellness. As the first exclusive e-commerce partner of UEFA EURO 2024, we are looking forward to bringing consumers closer to the action."

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Alibaba will reorganize its business, including its spin-off, into six companies, each with the flexibility to raise external capital and consider an IPO. This is the most significant transformation in the company's 24-year history. 

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As reported by the group on its news website AlibabaNews, the move better positions Alibaba's businesses to take advantage of market opportunities and stimulate growth. The turnaround has sent Alibaba shares soaring on Wall Street by nearly 14% to $98 at mid-session.

According to the plan, under Alibaba Group, six main business groups and several business companies will be established, including Alibaba Cloud Intelligence, Taobao Tmall Business, International Digital Business, Local Life, Cainiao and Dawen Entertainment, and other companies will also be independently operated and managed accordingly. 

Similarly, Alibaba Group will remain a holding company with Daniel Zhang as chairman and CEO, while its CEO and board of directors will manage each of the six business groups. 

Each business group will retain the flexibility to raise external capital and conduct an IPO when they are ready, except Taobao Tmall, which will continue to be owned by Alibaba Group.

Alibaba wants to be more ‘agile’ in its business

Over the past two years, Daniel Zhang has repeatedly emphasized internally and externally that "agile organization is the way to achieve efficient governance of ultra-large multi-business and multi-format enterprises." 

In a letter to employees, Zhang has explained that "every business group and enterprise must actively face rapid changes in the market and technology, form their development strategies, make quick decisions, strive for progress, be courageous in innovation, and face the test of the market." "The market is the best litmus test. In the future, qualified business groups and enterprises will have the possibility of independent financing and listing," the CEO has apostrophized.

Zhang, in addition to being CEO of the holding company, will also serve as the top executive of Alibaba Cloud Intelligent Group, which will house all cloud activities, artificial intelligence and businesses such as DingTalk, the multinational has detailed. 

Trudy Dai will lead Taobao Tmall and will include commercial activities in China, such as the Taobao and Tmall digital marketplaces, the Taobao Deals platform, as well as Taocaicai, the 1688.com wholesale marketplace and other businesses.

Local Life and Amap have new heads 

The Local Life Group will have Yu Yongfu as CEO and will take over the Amap navigation platform, delivery service Ele.me, and other businesses, while Wan Lin will continue as CEO of Cainiao Group. In addition, Jiang Fan will be the top executive of the Overseas Digital Business Group, which will encompass international trading companies Lazada, AliExpress, Trendyol, Daraz, and Alibaba.com, while Fan Luyuan will be CEO of Dawen Entertainment Group, including Youku, Alibaba Pictures and other businesses "To solve the development of productive forces and create differences, we must first start with the reform of production relations. This is also the starting point of Alibaba's organizational change," the group's top executive has asserted.

At the same time, Alibaba Group's functional departments will also usher in orderly changes. According to the letter sent to employees, "the group's middle and back office will be completely light and lean, meaning that the 'big middle office' capabilities established by Alibaba since 2015 will be gradually absorbed by a stronger front office to serve more diversified development needs in a more agile manner."

Between October and December last year, the third fiscal quarter for Alibaba, the group's attributable net profit rose 69% to 46.815 billion yuan (€6.384 billion), while its sales grew 2.1% to 247.756 billion yuan (€33.783 billion).

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Alibaba reported a net profit of 48.993 billion yuan (about 6.68 billion euros) in the first nine months of its fiscal year, which will end next March 31, representing a drop of 37.3% over the same period of the previous year, the company reported in its income statement submitted to the Hong Kong Stock Exchange where it is listed. 

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In total, the Chinese company's revenues between April and December 2022 reached 660,487 million yuan (about 90,063 million euros), 1.8% more than in the same period of the previous year, despite the impact of the Covid-19 restrictions on the Asian group during the past year.

Specifically, Alibaba's commercial business in China invoiced 1% less, up to 446,658 million yuan (60,905 million euros), while the international trading platform earned 8% more, up to 50,663 million yuan (6,908 million euros). 

The Cainiao logistics business posted a nine-month turnover of 42,062 million yuan (5,735 million euros), up 22% year-on-year. Similarly, Alibaba's cloud business posted a 5% increase in turnover to 58,621 million yuan (€7,993 million).

Between October and December, the third fiscal quarter for Alibaba, the group's attributable net profit rose 69% to 46.815 billion yuan (€6.384 billion), while its sales grew 2.1% to 247.756 billion yuan (€33.783 billion).

Alibaba says demand is weaker 

"We had a solid quarter despite weaker demand, supply chain and logistical disruptions due to the impact of changes in measures by Covid-19," Daniel Zhang, president, and CEO of Alibaba Group, said in a statement. 

"Looking ahead, we expect a continued recovery in consumer confidence and economic activity," the group CEO added, asserting that "we are focused on driving growth for our customers amid the competitive landscape, as well as creating long-term sustainable value for our shareholders."

"In the last quarter, we continued to improve the efficiency of our operations and cost optimization, which resulted in solid profit growth," said Toby Xu, Alibaba's CFO, who noted that the group's liquidity remains "strong" thanks to its "healthy cash flow generation capability." 

Xu also revealed that, in its third quarter, the company repurchased some $3.3 billion in U.S.-listed shares under a plan that will allow it to buy back another $21.3 billion in holdings through March 2025.

The Chinese turnover is also down

Between October and December, turnover from trading in China - its primary line of business, where its portals Taobao and Tmall stand out - fell by 1% year-on-year, while revenue from the international section rose by 18%. However, the latter still accounts for only 8% of the total. 

Among the other segments in which the group operates, the growth of Cainiao, its logistics subsidiary, stood out; which invoiced 27% more than in the same period of the previous year and went from representing 5% to 7% of the group's total revenues.

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Alibaba shares soared above 8% and hit six-month highs after its founder, Jack Ma, finally relinquished control of the techno-financial subsidiary Ant Group. 

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This is the Chinese fintech whose IPO was halted in 2020 by the Beijing authorities. This would end the agreements that had allowed Ma to maintain a dominant position within Ant Group's corporate governance structure.

Alibaba announced last Saturday - in a public statement - a full-size readjustment in the voting rights structure, diluting Ma's power, to make the company more transparent and diversified. 

This decision is an essential step in the company's internal reorganization process. 

Alibaba shares will benefit from a more diverse and transparent structure  

Ant Group gives 10 people, including the founder, management, and employees, independent voting rights. 

After the restructuring, the major shareholders will exercise their voting rights independently. So no single shareholder will have, alone or jointly with another shareholder, the power to control directly or indirectly the whole company. 

Despite this, Alibaba still holds a third of Ant Group's shares, according to the Hong Kong newspaper South China Morning Post, owned precisely by the conglomerate. 

Although the fintech communicated this weekend that several of its executives left the parent company's governing body to strengthen the subsidiary's independence.

Ant Group holds control over Alipay 

Ant Group, a global technology provider created as a subsidiary of Chinese e-commerce giant Alibaba, is the operator of Alipay, the world's largest digital payments platform with hundreds of millions of monthly users in China and beyond. 

Its expected debut in the financial market was suddenly halted by a decision of the Chinese authorities in a campaign of scrutiny that has resulted in several sanctions against large companies.

Overall, it seems that the near future looks bright for the Chinese tech giant. 

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Alibaba.com, the B2B marketplace of Alibaba Group, has launched a new service 'Alibaba.com Select', designed for retailers, distributors, wholesalers, and medium and large enterprises that currently import or are interested in importing from China.

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The service is inspired by Alibaba's .com expertise in B2B e-commerce and its partner ecosystem and has been designed exclusively for B2B buyers.

Alibaba.com Select: a logical solution 

These new services could be inspired by the study 'The Future of B2B E-Commerce: Online Platforms', conducted by Euromonitor International in collaboration with Alibaba.com.

The study showed that large companies have managed to adapt quickly to digital-only business, but SMEs (sellers or buyers) have been slower to change their strategy and adopt e-commerce.

According to the study, this is often due to a lack of resources and access to information about the possibilities offered by the platforms, leading them to focus more on collaboration with established partners. 

'Alibaba.com Select' directly addresses this need by providing a comprehensive B2B sourcing service.

Alibaba aims to streamline the B2B purchase process 

The purchasing process for a buyer within 'Alibaba.com Select' has been streamlined and simplified into five phases: 

• sending a request for a quotation
• analysis of the quotation
• analysis of products and documentation
• and signing the contract and agreement
• Payment and delivery times 

Throughout the entire process, Alibaba .com's European team will support the buyer. In order to provide buyers with a high level of service, Alibaba.com will carefully select the most suitable products. The buyer can be confident in receiving maximum visibility of production processes and real-time tracking of shipment status.

The project is mainly active in the following product categories, with competitive offers in terms of product quality and price: household products, including textiles and bedding, apparel, small household appliances, consumer electronics, DIY-related products, garden furniture, solar-related products (photovoltaic panels, microinverters) and E-Mobility (charging stations).

Alibaba.com has a network of 200,000 suppliers and more than 40 million buyers in over 200 countries. The launch of this new service continues the commitment to support B2B buyers in optimizing their own supply chains.

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U.S. regulators have selected a group of Chinese companies for inspection. As reported by Reuters, e-commerce giants such as Alibaba Group and JD.com will be among the companies selected.

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The move came immediately after Beijing and Washington had reached an agreement on August 26 that finally allowed U.S. regulators to examine the accounting of Chinese companies. This would end a fight that could have seen more than 200 Chinese companies banned from the U.S. stock market.

The Public Company Accounting Oversight Oversight Board (PCAOB) has notified Alibaba that it will be among the first companies to be audited. Alibaba's U.S.-listed shares following the news saw a nearly 3% decline.

PCAOB will select the riskiest first 

The PCAOB, which oversees audits of U.S.-listed companies, announced on Friday that the companies that were to go through the examination process had already been notified. They also announced that their staff will arrive in Hong Kong in mid-September.

The order for passing the audits of U.S.-listed companies will be based on risk factors. Guided by factors such as size and the sector to which they belong.

Kent Bonham, the PCAOB's spokesman, said in late July, "The PCAOB must have full access to the audit work papers of any company it chooses to examine or investigate, no omissions, no exceptions."

Alibaba could come off the expulsion list

On August 1, Alibaba Group announced that it could be delisted from the U.S. Stock Exchange because of the conflict between the Chinese government and U.S. regulators. 

Now things could change with the new agreement: If the PCAOB does not conduct a full inspection or investigation within the next three years, Alibaba Group will remain on the expelled list, otherwise, if the inspection is conducted and yields a favorable result, Alibaba could come off the expulsion list. 

Meanwhile, Alibaba has pledged to continue to comply with laws and regulations and strive to maintain dual listing status on both the New York Stock Exchange and the Hong Kong Stock Exchange

"Hong Kong and New York are important financial centers in the world. Openness, diversity, and high internationalization are their common characteristics. Hong Kong is also the starting point of Alibaba's globalization strategy. We are full of China's economy and future. Firm confidence." said Daniel Zhang, Alibaba’s CEO.

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