Alibaba Group Subsidiaries

Alibaba Group Holdings Ltd. (NYSE: BABA) is commonly compared to Amazon due to its competing e-commerce platforms. Yet in the Alibaba vs. Amazon comparison, Alibaba continues to show innovation in the way it diversifies and leverages its many businesses, from logistics to retail stores.

Since Alibaba’s founding in 1999, the company has seen exponential growth (particularly Alibaba stock growth) due in part to its innovative approach to connecting buyers and sellers. Essentially, the company makes it easier for small businesses and manufacturers to compete both domestically and internationally.

But Alibaba didn’t stop at simply becoming China’s premier business-to-business (B2B)
e-commerce site. The company continued expanding by establishing a network of Alibaba group subsidiaries that offer everything from financial services to grocery shopping – making it one of the best stocks to buy now.

BABA’s decision to expand and continue building its e-commerce empire has certainly proven successful.

Both its quarterly and yearly fiscal earnings reported in March 2020 showed revenue growth of 35% year over year (YoY), which was bolstered by its cloud computing and retail businesses.

Some of the most well-known subsidiaries of Alibaba include:

  • Taobao
  • Tmall
  • Freshippo
  • Ant Group
  • DingTalk
  • Lazada Group
  • South China Morning Post
  • Intime department store
  • Alibaba Pictures Group
  • 1688
  • Youku (or Youku Tudou Inc.)
  • AliExpress
  • Alibaba Cloud
  • Cainiao

The development and acquisition of this diverse group of businesses supports Alibaba’s digital economy and has positioned Alibaba as a force in the world of e-commerce.

So, to better understand the history of Alibaba and its unmatched success, we’re going to walk you through eight of the most important Alibaba subsidiaries…

No. 1: Taobao

Touted by Alibaba as “China’s largest e-commerce destination,” Taobao (or Taobao Marketplace) uses the power of analytics and technology to give consumers access to personalized shopping experiences that may otherwise be unavailable.

As the largest Alibaba subsidiary, Taobao focuses on consumer-to-consumer (C2C), which includes a thriving social community where consumers can interact with each other and merchants on a more personal level.

Consumers can live stream their shopping, directly chat with a seller, and share their recent purchases, all of which help to boost engagement on Taobao’s site.

This unique combination of social engagement and e-commerce has certainly contributed to Taobao’s success and helped to launch the Alibaba group of businesses to some pretty stellar revenue for the fiscal year ending in March 2020.

No. 2: Tmall

Whereas other subsidiaries of Alibaba focus on smaller businesses, Tmall is a B2C
e-commerce platform for consumers to purchase high-quality products from established brands, including products that aren’t even available in brick-and-mortar retail stores.

Brands can set up “storefronts” in Tmall (that come with a fee) in which buyers can engage in a premium shopping experience, likened to the way shoppers peruse through a high-end mall.

There is an additional Alibaba subsidiary and offshoot of Tmall called Tmall global, which allows international brands to market to the Chinese.

For brands looking to open a storefront on Tmall, it needs to be able to pay the pricey registration fees. But once established, brands can begin marketing and selling from their own Tmall storefront.

No. 3: Ant Group

Ant Group started in 2014 as a way to manage Alipay, a digital payment service that is used by Chinese consumers.

As an Alibaba subsidiary, Ant Group offers financial services to consumers and small businesses, many of which may be underserved.

These services include a number of digital options like payment services and daily life services.

In collaboration with global partners, Ant Group strives to innovate financial services. It has pursued such initiatives like blockchain, contributing to its ubiquitous use, which includes over a billion users.

Recently, it was announced that Ant Group is planning a dual IPO in Shanghai and Hong Kong, set at $200 billion.

No. 4: DingTalk

DingTalk, likened to American workspace collaboration platform Slack, gives organizations and educational institutions creative, innovative ways to work together and share important information.

This subsidiary of Alibaba facilitates remote work, instruction, and communication, helping users stay connected and streamlining workflows.

While used by millions of Chinese workers, it has faced criticism for keeping a watchful eye on users with comprehensive monitoring features that some feel go too far.

Yet, DingTalk claims to have over 200 million individual users, showing its popularity and usefulness as a part of the Alibaba Group of businesses.

No. 5: 1688

As a subsidiary of Alibaba, and strikingly similar in function, 1688 is a wholesale marketplace that launched in 1999, but focuses on domestic trade in China. With over 100 million users, it’s wildly popular, like so many other Alibaba subsidiaries.

Its focus is on facilitating transactions between wholesale sellers and buyers who trade apparel, accessories, home décor, and other general merchandise.

No. 6: Freshippo

In 2016, the Alibaba Group launched its own proprietary grocery retail chain called Freshippo. Coined as a “new retail” operation, it’s aimed at giving consumers a new approach to shopping, blending online and offline activities to fulfill orders.

For shoppers who do in-store shopping, Freshippo makes the experience fun and interactive featuring the use of robots.

This subsidiary of Alibaba makes shopping quick and efficient, with 30-minute delivery offered to customers who are within a 3 km radius of a brick-and-mortar Freshippo location. Using the company’s mobile app, shoppers can search and place orders, either remotely or while in store.

Alibaba currently has over 200 Freshippo stores that are individually operated serving customers who want to take advantage of the unique shopping experience that’s driven by the comprehensive app.

No. 7: Cainiao

Cainiao is a subsidiary of Alibaba that’s billed as a smart logistics network. Due to the demand for filling consumer orders across The Alibaba Group’s vast network of e-commerce businesses, Cainiao was created in 2013. It can fulfill orders within 24 hours in China, and within 72 hours internationally.

Global fulfillment is possible through Cainiao’s network of logistics partners that offer domestic and international services and supply chain management. This makes Cainiao a one-stop shop for merchants and consumers who have logistics needs.

No. 8: Youku

Youku, which operates as an Alibaba subsidiary, is billed as the “largest online long-form video platform in China” with billions in monthly views, mostly from China’s younger demographic.

As one of the most recognized video brands in China, and an Alibaba investment, the Youku platform allows users to search, view, and share videos to multiple devices. Using proprietary data and analytics insights, Youku is able to give users relevant content and other complementary content that drives business to other Alibaba businesses.

What’s Next for Alibaba Subsidiaries?

Alibaba stock news has been good, with quarterly and YoY earnings showing growth and plenty of potential for continuing their meteoric rise.

Now that you know more about Alibaba’s business strategy and growth, it’s time to look at whether it’s a good investment or not.

And what Money Morning Executive Editor William Patalon III has to say about Alibaba stock might surprise you.

Check out what’s in store for Alibaba stock right here…

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