Ali’s financial report： Ele.me from ＂steady growth＂ to ＂stable and fast＂, a number of key indicators are improving simultaneously

On the evening of August 10, Alibaba Holding Group announced the Quarter 1 results for fiscal year 2024. As Alibaba’s first financial report after launching the "1 + 6 + N" organizational change, Local Life Group performed well in it: in this quarter, driven by the strong growth of Ele.me and Autonavi, Local Life Group’s revenue grew by 30% year-on-year; at the same time, driven by the overall business scale and efficiency improvement, the segment loss continued to narrow, and the adjusted EBITA (operating profit and loss) reached the best level in recent years.

This quarter’s financial report also shows that due to the fact that Ele.me continued to record positive unit economic benefits, the order density continued to increase, and Ele.me’s losses continued to narrow year-on-year. Under the dual efforts of overall business scale and efficiency improvement, the loss of Local Life Group continued to narrow rapidly: Adjusted EBITA (operating profit and loss) continued to narrow to 1.982 billion yuan from a loss of 2.834 billion yuan in the same period last year.

The growth of high-quality supply, the improvement of consumer demand, and the continuous improvement of distribution capabilities have jointly driven the development of Ele.me from "stable growth" to "stable and fast": while the overall operating efficiency remains healthy in fiscal 2023, Ele.me is showing a strong and considerable growth trend at the beginning of fiscal 2024.

Firmly maintain the vision of "ecological progress" and continue to support high-quality merchants

The joint improvement of the supply quantity and quality of merchants is behind Ele.me’s firm investment in ecology. From April to June 2023, as the impact of the epidemic fully subsided, local travel and consumer demand accelerated. In order to better support the business recovery of merchants and work with merchants to serve consumers in more scenarios, Ele.me launched a series of support measures for merchants during the quarter.

In June, Ele.me held the 2023 Summer Merchant Conference and announced that it would increase investment in "six major areas" to continue to build a "benign, open and common development" merchant ecosystem, including: supporting good stores and good products, increasing investment in Sunshine series merchants, establishing local merchant academies, establishing open APIs, focusing on supporting sub-sectors to explore innovation, and re-launching summer consumer promotion activities. The merchant conference also sent a clear signal: Ele.me is committed to the long-term and firm strategic direction of an open and ecological platform.

At the 2023 Summer Merchant Conference, Eli.me COO Chen Weiye released business support measures for merchants

In order to fully support the launch of new takeaway stores by catering merchants and help new merchants in the industry to harvest business growth, Ele.me launched the "Young Seedlings Plan" in the quarter, launching special project measures for new takeaway merchants in terms of traffic, service and training. In addition to giving up to 28 days of free traffic support and preferential participation in key activities, Ele.me continues to implement all-day independent and easy settlement, and merchants can open stores on the same day of application. At the training end, Ele.me also launched 60-day customized new store growth training support for new store merchants to help new takeaway merchants master takeaway operation skills from scratch.

In order to meet consumers’ escalating demand for instant e-commerce, Ele.me has also continued to introduce various high-quality brand merchants to increase the supply of various retail products on the platform. In this quarter, Ele.me has successively reached cooperation with Apple and Suning.com: currently, more than 500 Apple authorized stores and more than 600 Suning.com stores across the country have been fully listed on Ele.me, covering major cities across the country. Through Ele.me, consumers can place orders for all kinds of Apple digital products anytime, anywhere, and buy more than 3,000 kinds of Suning.com store products such as mobile communication, digital computers, and household appliances. The fastest delivery in the city is 30 minutes.

Innovative user activity design continuously upgrades the consumer experience

The increase in the active level and order volume of Ele.me on the consumer side is driven by experience innovation. From April to June, during various consumer festivals such as the "May Day" holiday, Mother’s Day, and 520 Confession Day, Ele.me continuously met new consumer demand trends through platform innovation activity design. At the end of the quarter, Ele.me launched a new user activity such as "Guessing Answers Free Order" and "City Free Order" in this summer action, creating a new experience for the summer home delivery scene.

For example, during the "May Day" holiday, Ele.me worked with multiple platforms to jointly distribute cross-platform user benefits, including takeout, tickets, taxis and other different scenarios during various travel journeys. Through the "May Day Guardian Gold", consumers can more conveniently enjoy local consumption discounts during the holiday.

In mid-to-late June, with the launch of Ele.me’s summer action this year, last year’s popular online "free answer" activity returned again, and a variety of new ways to play were launched. Unlike last year, this year’s Ele.me free order activity does not need to guess the time, and the free order time will be told to users in advance. If you participate in the answer at the corresponding time, you will have the opportunity to grab the free order place.

This year’s "free order" upgrade of Ele.me not only reflects customer engagement. It is reported that as of the beginning of August, more than 1.50 million merchants participated in this year’s Ele.me "free order" activity, which is 2.5 times that of the same period last year. Among them, Starbucks, Wallace, Juewei Duck Neck, Xibei Noodle Village, McDonald’s, Gu Ming and other national chain brands are deeply involved in the activity and make joint marketing of "free order" IP.

With the rise in temperature and the arrival of the summer economy, Ele.me also collaborates with major platforms to carry out a series of activities such as "50% off Friday", "Crazy Weekend", "18 Red Packet Festival", "This Cup I Invite" to promote consumption and provide more preferential benefits for brand members and platform members. At the same time, for platform Black Diamond members, Ele.me also launched exclusive butler and other member services at the same time, and continuously upgraded the member service experience through high-quality service guarantee.

Continue to strengthen the construction of logistics capabilities to improve the care and protection of riders

Continued investment in on-the-go network capacity building and technological innovation has driven the overall order efficiency of the Ele.me platform to continue to improve, further consolidating the performance chassis for business growth. In order to better cope with the rapid growth of orders in spring and summer, Ele.me continued to strengthen investment in logistics network capacity building in the quarter, and on the basis of last year, further enhanced rider summer care and protection measures.

According to public reports, through technological innovation, Ele.me Blue Knight can send more orders in the same period of time. Compared with June last year, Ele.me riders’ combined order rate increased by 85.7% in one year. At the same time, Hummingbird has increased its investment in IoT equipment such as sideboards, smart helmets, and smart food boxes, continuously improving the convenience and safety of Blue Knight’s work.

After the launch of the Ele.me Summer Action in June, Ele.me provides riders with a variety of incentive measures and care measures including special project red envelopes, summer running order subsidies, and summer cool bags. In order to allow riders to deliver meals safely while reducing outdoor exposure, Ele.me also carried out front platform reminders according to local weather warnings this year to optimize routes and send order protection for riders.

　　Ele.me accelerates the construction of rider stations across the country

Recently, Ele.me has launched four major measures: Blue Knights go to college for free, the construction of "Hundred Cities Million" Knight Inn, the upgrade of the Blue Knight Fund, and the heavy award of "Community Hero" to better support the work, life and development of riders. Among them, the "Hundred Cities Million" plan accelerates the construction of Knight Inn nationwide, allowing more Blue Knights to enjoy the inn service, and better solving problems such as "difficulty in eating, drinking, resting, and charging".

It is worth mentioning that in December last year, Ele.me released the industry’s first "Rider Growth and Development System". In the past year, 2,409 riders have been promoted to webmaster and higher positions. This development and growth development system is currently accelerating among riders across the country.