3
have produced effective results and mo
re brands have decided to proactiv
ely work with us in joint anti-
counterfeiting initiatives. Recently we formed a coaliti
on with about twenty major brands to leverage our big
data capabilities to crack down on
counterfeiting. These brands incl
ude Louis Vuitton, Samsung, Swarovski,
Mars, Inc. and Ford Motor Company.
Cloud Computing
Paying customers for cloud computing grew to 765,000,
an increase of about 114,000 from last quarter,
driving revenue to RMB1,764 million (US$254 million) dur
ing the quarter, reflecting a 115% year-over-year
growth. Alibaba Cloud’s top priority remains expanding ma
rket leadership. We will continue to invest in
customers through more cost effectiv
e solutions for standard products
as well as developing and deploying
more sophisticated value-adde
d products and services.
Alibaba Cloud expanded its global fo
otprint with new data center la
unches in Japan, Germany, the Middle
East and Australia during the quarter. Its internati
onal expansion will provide customers worldwide with
greater access to its diverse offerings
, including elastic computing, data st
orage and cloud security services.
Digital Media and Entertainment
In November, we consolidated the Digital Media a
nd Entertainment businesses
under a single management
team to realize greater synergies wi
thin the segment and with other Al
ibaba businesses. For instance, Youku
Tudou participated in the 11.11 Global Shopping Festival
for the first time and show
cased live streaming of
the Countdown Gala Celebration to m
illions of users on the Youku Tudou App.
We maintained our competitive posi
tion in digital entertainment in Ch
ina through a combination of licensed
premium content as well as self-produced and join
t-produced programming, achie
ving synergies across our
entertainment platforms on both mob
ile and living room screens.
New Retail Strategy and Investments
“New Retail” leverages our substantial consumer re
ach and our capabilities in
big data technology to
transform traditional retail by addressing the increasin
gly sophisticated needs of consumers and improving
efficiency across the entire value chain of brands and re
tailers. Our New Retail strategy will enable us to tap
into the entire US$4.8 trillion retail sector in China by
eliminating the distinction
between online and offline
commerce, as Chinese consumers today engage in co
mmerce anywhere, any time with the help of mobile
phones. To this end, we are partnering
with brick-and-mortar retailers in
different verticals through equity
investments and deeper operational
integration, which will allow us to
deploy our proprietary omni-channel
solutions to create a seamless
shopping experience for consumers.
Sanjiang Shopping Club –
In November 2016, we agreed to inve
st RMB2.1 billion (US$302 million) for a
35% equity stake (including shares
and convertible bonds) in Sanjiang
Shopping Club, one of the leading
neighborhood grocery chains in Zh
ejiang Province. Enabled by Alib
aba’s technology solutions, Sanjiang
plans to pilot a new shopping format
at its local grocery stores to enha
nce the shopping experience for fresh
and perishable products.
Intime Retail Group –
On January 10, 2017, we announced an offer to
acquire a controlling stake in Intime
Retail Group, a leading department st
ore operator in China with 29 depart
ment stores and 17 shopping malls.
We expect that the maximum amount of cash requir
ed for the transaction will be approximately HK$19.8
billion (US$2.6 billion).