Alibaba Group Holding Limited (NYSE:BABA) Q4 2019 Earnings Conference Call Transcript
May 15, 2019 • 07:30 am ET
Thank you. Ladies and gentlemen, we'll now begin the question-and-answers session. (Operator Instructions) Our first question comes from the line of Alex Yao of JPMorgan. Please ask your question.
Hi. Good evening, management, and thank you for taking my question. I want to follow up on Maggie's comments regarding the investment strategy in lower tier cities. I think you guys have been doing similar initiatives such as (inaudible) for a while and given the current change in operating environment such as competitive landscape, penetration rate in different cities, disposable income across different demographic, et cetera, et cetera. What do you think does it take to be competitive in the lower-tier cities in FY20 and what kind of financial resource you are willing to invest in these cities and consumer demographic? Thank you.
Well, as you see, in fiscal year '19, we add over 100 million new customers in our China core marketplaces, and over 77 million of these new customers are from low-tier cities. And as we addressed in our remarks, we will continue to invest in low-tier cities and in the rural areas to acquire the new customers. And we strongly believe that these new customers will actually -- when they tap into our marketplaces, when they change their lifestyles and they will -- actually we will basically give them broader selections and which will -- to enlarge our addressable market. So, that's why we expect to continue to invest in terms of the marketing spending, in terms of the a very well planned, I mean marketing solutions.
And also, as we said in our remarks, we don't want to -- for these low-tier cities customers and new customers, we want to give them better experiences with organic results of the search and recommendations, and as well as, to give them a broader selections for their first few purchases.
Thank you. Our next question comes from the line of Grace Chen of Morgan Stanley. Please go head.
Yeah. Thank you very much for taking my question. Congratulations for the strong results. The question is about the guidance for fiscal year '20. Can you help -- can you walk us through the details of the sales guidance, for example, the core revenue expectation and other segments? And also under what kind of macro conditions have we baked into the sales guidance? Maggie just mentioned that we currently do not plan to monetize feeds in fiscal '20. I'm wondering does that imply there could still be potential changes in the plan if the business and market conditions allow us to monetize recommendation feeds in fiscal ' 20? Thank you.
Sure. When you look at the RMB500 billion revenue, it represents approximately 33% year-on-year growth. So as you see from the previous years, our significant revenue are coming from our China retail businesses, and this will also be the case for the fiscal 2020. One thing I would like to mention is that we do expect the proportion of revenue from our direct