Alibaba News Roundup: Share Buyback Update; Ant Improves Governance; McDonald’s China Joins Forces With Cainiao

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Alibaba News Roundup: Share Buyback Update; Ant Improves Governance; McDonald’s China Joins Forces With Cainiao

Photo credit: Alibaba Group

This week, Alibaba Group announced that it will voluntarily disclose any share buyback activity at the end of every quarter from now on.

In other news, Ant Group completed a corporate governance optimization project, becoming a controllerless entity.

And if you’ve ever pondered the provenance of your french fry, the answer may be at hand. McDonald’s China kicked its digitalization efforts up a notch this week by signing an agreement with logisitics group Cainiao to enhance traceability throughout its local supply chain.

Alibaba Boosts Transparency Into Share Buybacks

Alibaba said on Tuesday that going forward, it will provide updates on its share repurchase after the end of each quarter to enhance transparency for investors.

The move offers a timelier flow of information into the pace of the Hangzhou-based group’s share repurchases for investors. Previously, Alibaba updated the market on its share buybacks during quarterly earnings announcements.

The Hangzhou-based group also said it had bought back $2.9 billion worth of stock in the three months ending Dec. 31, 2023, up from $1.7 billion in the three months prior.

During all of 2023, Alibaba repurchased $9.5 billion worth of shares.

These buybacks were made in both the U.S. and Hong Kong markets under the group’s share repurchase program.

Alibaba’s share repurchase program, which remains in effect through March 2025, still has $11.7 billion left to go as of Dec. 31. 

As of Dec. 31, Alibaba had 20 billion ordinary shares, or 2.5 billion American depositary shares (ADSs), outstanding, compared with 20.7 billion ordinary shares, or 2.6 billion ADSs, from Dec. 31, 2022.

Its share repurchase program resulted in a net reduction of 3.3% in its outstanding shares in the last 12 months after accounting for shares issued under its employee stock ownership plan.

Ant Completes Corporate Governance Optimization

China’s central bank has listed Ant Group as without a controller on its website, finalizing the corporate governance reforms the digital finance company announced about a year ago.

In a notification dated Dec. 29, the People’s Bank of China said it agreed to Alipay (China) Network Technology Co., Ltd., one of Ant’s entities as having “no actual controller”.

In response to a question from Alizila, an Ant spokesperson said that the corporate governance optimization announced on Jan. 7, 2023 has been completed and it will not affect the company’s day-to-day business operations.

For context, on Jan. 7 last year, major shareholders notified Ant that they intended to align their voting interests with their economic interests. The adjustment changes how Jack Ma, lead founder of Alibaba Group, can exercise voting rights jointly with persons acting in concert, to each of 10 individuals exercising their voting rights independently.  

As a result, no shareholder would, alone or jointly with another shareholder, have the power to control the outcome of Ant’s general meetings, nor nominate the majority of Ant’s board of directors.

Therefore, no shareholder, alone or jointly with other parties, controls Ant. It also means Ant’s shareholding structure is more transparent and diversified. The adjustment does change the economic interests of any Ant’s shareholders and their beneficiaries.

Some investment analysts viewed the corporate governance enhancement positively.

“The removal of any controlling shareholder will not only allow Ant to operate in a more transparent and regulated manner but also mitigates concentration and concentration risk,” said Morgan Stanley analysts in a note to investors.

Regarding the PBOC’s acknowledgment of the adjustment, the analysts wrote: “We think this symbolizes easing regulatory pressure on Ant with further improvement in governance, which could pave the way for a potential eventual listing of the entity.”

Separately, Research and Markets released a report saying the global mobile wallet market’s size hit $142.2 billion in 2022. Looking forward, it said the market is set to reach $387.8 Billion by 2028, a compound annual growth rate of 18.2%.

McDonald’s China Partner to Construct Digital Supply Chain

This week, the Chinese arm of McDonald’s signed a strategic cooperation agreement with Alibaba’s logistics unit Cainiao to build a digitalized supply chain for the fast-food chain.

As part of the project, Cainiao will develop a digital ID card tool powered by Radio Frequency Identification to improve traceability between the chain’s outlets and their suppliers.

Some McDonald’s restaurants have already implemented the technology through a pilot program, which cut daily inventory times from one hour to 15 minutes and improved data accuracy of this process by 30%, according to the company.

McDonald’s has nearly 5,800 locations in China and over 200,000 employees, making the country its second-largest market in the world.

In 2024, as shoppers increasingly lean on artificial intelligence to answer questions and refine their searches, they will expect merchants, brands and marketplaces to keep pace.

We canvased Alibaba Group’s businesses, marketplaces and sector experts for their thoughts on consumer trends set to shape the industry in 2024 and how AI can help meet demand.

Read the story here

LVMH’s Chaumet Launches on Alibaba Marketplace Tmall

French luxury jewelry brand Chaumet is cutting the ribbon on a flagship store on Alibaba Group’s business-to-consumer marketplace Tmall, part of its drive to reach Chinese consumers.

Chaumet is one of the last LVMH brands to launch on Tmall. Sister brands French luxury menswear brand Berluti and Italian jeweler Bulgari launched on Tmall in 2022. Chaumet’s Tmall store is its first on a third-party platform in China.

Get the full scoop here

Chinese Tourism Over New Year 2024 Takes Off As Prices Drop: Fliggy Report  

Chinese holidaymakers entered 2024 in jet-setting style as New Year’s Day domestic travel bookings more than doubled year-on-year, according to data from Alibaba Group’s travel platform Fliggy.

Tourists rang in the New Year by watching fireworks or light shows, attending concerts, shopping and gastronomy trips. They also liked to dress in hanfu, traditional Chinese costume worn by the Han Chinese, and visit historical landmarks.

Stay up-to-date on the story here

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Alibaba News RoundupAnt GroupBuybackCainiaoMcDonald'ssharessupply chain
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