Alibaba has many business units, including e-commerce, finance, logistics, cloud computing, big entertainment, etc., all of which belong to 25 business units. It is difficult for almost everyone to fully explain all its businesses. However, it is well documented that the revenue of three business units accounts for 99% of Alibaba's total revenue.

How does Alibaba make money and what is its most profitable business?

Let's take Alibaba's revenue in the last quarter as an example. The total revenue in that quarter was 17 billion US dollars, of which the core business, cloud business, and media and entertainment business were the core. Let's take a look at them.

1. Alibaba's core business

Alibaba's most core and profitable business is the e-commerce business. The total revenue in the last quarter was close to 15 billion US dollars, accounting for 88% of its total revenue in the quarter, an increase of 40% year-on-year.

Its e-commerce revenue mainly comes from Taobao and Tmall. The former is China's largest online shopping platform, and the latter's total value of physical goods increased by 29% last quarter, which is higher than the industry as a whole.

How does Alibaba make money, and what is its most profitable business?

It is reported that Alibaba currently has 699 million monthly active users in the Chinese retail market, an increase of 33 million from the previous quarter. It can be said that this group of active customers is Alibaba's most important asset.

2. Alibaba's cloud business

Alibaba's cloud computing business has gone through 9 years of development. Its revenue in the last quarter reached 962 million US dollars, which seems not conspicuous in the total revenue of 17 billion US dollars in the whole quarter. However, its cloud computing business is growing rapidly, with revenue increasing by 84% in the past year.

How does Alibaba make money, and what is its most profitable business?

In addition, Alibaba's cloud platform now occupies more than 50% of the market share in China, but its share in the global cloud market is not large, accounting for only 5%. In the international market, Microsoft and Amazon's cloud services dominate.

3. Alibaba's media and entertainment business

Alibaba's media and entertainment business also has considerable development potential. In the past quarter, its revenue increased by 20% year-on-year to US$944 million.

The revenue growth of its media and entertainment business was mainly due to mobile search and game releases, as well as the increase in paying users of Youku and Tudou.