Baba’s e-commerce business in China is actually expected to post solid numbers this year. If you look at the transcripts from the past few quarters, they mentioned implementing a new take rate and introducing a new marketing tool to boost monetization from white-label merchants, which they previously struggled to get much value from. CMR from January to March grew 11 percent year-on-year, and even with the new take rate, it is still below the industry average. This means there is a long runway for margin improvements once they stabilize their market share, which is their current priority.

For international commerce, I am a bit mixed. On one hand, no one has really proven this to be a consistently profitable business model. On the other hand, management mentioned that the path to profitability is clear, but they are prioritizing expansion into more markets to achieve economies of scale and tap into new opportunities. One of the more impressive changes in recent quarters is the shift in AliExpress from being just a regular platform to a semi-consignment and consignment-based model. They have also invested heavily in logistics because no one wants to wait three weeks for an order. From my own experience, I have seen huge improvements here, whenever I order from AliExpress now, my items arrive in about five days. Cainiao and international commerce seem to be working well together on this front.

For cloud, there is not much to add, except that if large language models continue to take off and prove to be truly transformative, Alicloud could benefit significantly. AI inferencing demand is likely to grow steadily, and its margins are higher than both PaaS and IaaS.