Good day, everyone, and welcome to Alibaba Group's March Quarter 2020 and Fiscal Year 2020 Results Conference Call. With us are Daniel Zhang, Executive Chairman and CEO, Joe Tsai, Executive Vice Chairman, Wu, Chief Financial Officer. This call is also being webcast from our IR section of the corporate website. The replay of the call will be available on our website later today. Let me quickly cover the safe harbor. Today's discussion will contain forward-looking statements, including revenue guidance. These forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current guidance, including risks and uncertainties related to the COVID-19 pandemic. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the U.S. SEC. We are announced on the website of the Hong Kong Stock Exchange.
Any forward-looking statements that we make on this call are based on assumptions as of today, and we do not undertake any obligation to update these statements except as required under applicable law. Please note that certain financial measures that we use on this call, such as adjusted EBITDA, adjusted EBITDA margin, adjusted EBITA, adjusted EBITA margin, marketplace-based core commerce adjusted EBITA, non-GAAP net income, non-GAAP diluted earnings per share or EPS, and cash flow are expressed on a non-GAAP basis. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. Unless otherwise stated, growth rate of all stated metrics mentioned during this call refers to year-on-year growth versus the same quarter last year. In addition, during today's call, management will give their prepared remarks in English. A third-party translator will provide simultaneous Chinese translation on another conference line.
Please refer to our press release for details. During the Q&A session, we will take questions in both English and Chinese, and the third-party translator will provide consecutive translation. All translations are of convenience purpose only. In the case of any discrepancies, management statement in the original language will prevail. With that, I will now turn the call to Daniel.
Thank you, Rob. Hello, everyone. Thank you for joining our earnings call today. We have finished an extraordinary quarter and have delivered an outstanding fiscal year. Despite the impact of COVID-19 pandemic, Alibaba achieved the historical milestone of $1 trillion in GMV across our digital economy this fiscal year, a strategic goal that we set for ourselves five years ago. We at Alibaba have always been aiming for the stars while keeping our feet on the ground. The $1 trillion GMV milestone reflects the vitality of Alibaba's digital economy and as well as strong execution against the clear strategic vision. Our scale has now reached one-sixth of China's total retail sales, which was about $6 trillion last year. We believe there is still tremendous potential of growth. Digital adoption and transformation in retail are accelerating due to the COVID-19 pandemic, reshaping consumer behavior and enterprise operations.
On the consumer side, shopping online has become a habit for more people and in more product categories. On the retail side, online sales is no longer an option, but a necessity for the brick-and-mortars. We believe there is a new normal that will stay even after the pandemic is over. I would like to review the past quarter's performance in the context of the impact and recovery from the COVID-19 pandemic. On January 23rd, right for the Chinese New Year holiday, China announced the lockdown of Wuhan, the center of the pandemic. The lockdown measures implemented in other provinces and cities led to large-scale economic disruption in late January and February, which negatively affected our domestic e-commerce business during the period.
However, China quickly contained the pandemic by implementing measures such as strict social distancing, vast testing coverage, centralized mobilization of medical resources, and started to reopen the country for business in late February. By March 9th, China announced full recovery of logistics operation nationwide, except for Hubei province, where Wuhan is, and a normal life began to return for most of people in the country when Wuhan 10-week lockdown was lifted on April 8th. Since March, we have seen a healthy recovery in our China retail marketplaces. As of March 31st, 2020, annual active consumers on our China retail marketplaces reached 726 million, a net increase of 15 million versus the previous quarter. Mobile MAUs of our China retail marketplaces reached 846 million in March 2020, an increase of 22 million over December 2019.
[audio distortion ] an important role in supplying daily necessities to people impacted during the pandemic and have become widely popular among consumers. In the past quarter, both Freshippo and Taoxianda deliver stellar growth of more than 100% year-on-year. Approximately 60% of Freshippo's GMV came from online orders, up by 10 percentage points year-over-year. As lockdown measures eased in China starting in April, demand and popularity of our grocery business have remained strong.
We believe the consumer habit of buying fresh food and groceries online will continue after the pandemic, and online and offline integration will drive the New Retail model to the next stage of development. We have been investing for years to build the New Retail technology infrastructure, which will help us further strengthen our market leadership in this sector. As a leading cross-border import platform in China, Tmall Global has become an ever more important destination for Chinese consumers to buy imported products as they could not travel abroad during the pandemic. In markets outside of China, our international retail marketplaces such as Lazada and AliExpress, attracted over 180 million annual active consumers as of March 2020. Lazada's order volume grow more than 100% year-on-year during the fiscal year, and completed the March quarter with a strong finish despite the impact of the COVID-19 pandemic.
February and March 2020, our cross-border marketplace, AliExpress GMV growth was negatively impacted, mainly by supply chain and the logistics disruptions caused by COVID-19 pandemic. We are seeing signs of recovery in certain major market starting April but there are still uncertainties ahead. Our local consumer services business decreased by 8% year-on-year in the past quarter due to the impact of COVID-19. In April, year-on-year growth of our food delivery GMV turned positive as lockdown measures eased, restaurants began reopening, and people began returning to work in China. Alibaba Cloud continued its rapid growth in the past fiscal year, with revenue reaching RMB 40 billion, an increase of 62% year-on-year. During pandemic, our public cloud business grew rapidly, driven by increased consumption of video content, as well as wide adoption of remote working and learning.
Our cloud computing infrastructure and big data business have also played a key role in enabling business to quickly resume operation and production. We believe the pandemic will further accelerate digital transformation of enterprises. All industries, including public sectors, will choose to move their technology infrastructure to the cloud. DingTalk, our digital collaboration platform for enterprises, play an key role during the pandemic. Millions more enterprises and users in China are now using DingTalk to stay connected and work remotely. DingTalk also made significant penetration in the education sector as schools adopt the platform for their teachers and students. In March 2020, DingTalk conduct an average of over one million active classroom sessions on each school day. DingTalk's number of daily average active consumers during the working day grew significantly to 155 million in March.
As offices and schools reopen in China, DingTalk's number of active users came down from the peak level, but still maintain at more than 100 million DAU. In the past quarter, our digital media and entertainment business deliver healthy growth in paying subscribers and user time spent. As users' consumption of video content increased significantly during the pandemic. Youku will continue its focus on production and distribution of original and exclusive content while ensuring cost efficiencies and return on investment. During the past quarter, we leveraged our platform technology and other resources across the Alibaba ecosystem to support populations impacted by COVID-19 pandemic within China and around the world. We also implemented a comprehensive set of financial and business support measures to help alleviate the near-term challenge faced by our business customers and partners.
As of March 31st, 2020, Alibaba, together with Ant Financial, have contributed approximately RMB 3.4 billion in value in the form of donations, subsidies, and tech support. To name a few examples, we waived fees, reduced commissions, and offered logistic subsidies to our merchants. We worked with Ant Financial and other partners to advance working capital funds to our merchants to provide liquidity and to facilitate one-year loans with preferential interest rates. We used the RMB 1 billion special fund we established in January to procure medical and related supplies for parts of China affected by pandemic. Our logistics subsidiary, Cainiao, offered free delivery of medical supplies to destinations around the world through its extensive global logistics network. Our self-operated fresh food and grocery chain, Freshippo, committed to more than 200 remaining open for business even during a period where lockdown measures were in effect.
Freshippo also worked with its supply chain to keep our commitment to not raising prices, as well as maintaining adequate stock on the shelves. We made available AI technology to over 550 hospitals in China to help improving the speed and efficiency of their COVID-19 diagnosis during CT lung scans. The Alibaba Foundation, through combined efforts with Jack Ma Foundation and the Joe and the Clara Tsai Foundation, donated over 200 million units of personal protective equipment, testing kits, and ventilators to over 150 countries and regions. In April 2020, we further announced the 2020 Spring Thunder initiative, which aims to help export-oriented SMEs explore opportunities in the China domestic market through our China retail marketplaces. Expand into new markets through our international wholesale and retail marketplaces such as Alibaba.com and AliExpress. To develop digitalized manufacturing clusters. To accelerate the digital transformation of China's agricultural sector.
Alleviate financing challenges faced by SMEs by working with Ant Financial and its partners. The battle against the COVID-19 pandemic is not over. Although China has made good progress in fighting and controlling the spread of the coronavirus, with most businesses reopening and people returning to normal life, the threat of the pandemic is still looming in the rest of the world, and the timing and the pace of recovery is still uncertain. At the same time, tensions between the U.S. and China have added another layer of uncertainty to the post-COVID-19 world. Despite the uncertainties in the macroeconomic and the geopolitical environment, there is one thing we can certain. The world is moving towards digital first and the digital everything.
In the past two decades, Alibaba has developed comprehensive infrastructure and the capabilities built on digital technology for business, financial services, logistics, cloud computing, and big data to prepare for this new era. We believe our infrastructure and capabilities will play an important role in enabling all industries to embrace digital transformation, and the customers to embrace a digital lifestyle. In addition, we aim to empower SMEs around the world, including those in America, to access the Chinese and other global consumer markets and create new jobs. This is the hard work that Alibaba must undertake to fulfill our vision to make it easy to do business anywhere. It is also the fundamental assurance for our sustainable growth in the future. Now, I will turn it over to Maggie, who will walk you through the details of our financial results.
Thank you . Thank you, everyone, for joining us. I'd like to start my prepared remarks by addressing COVID-19's impact on our financials and recent trends. Back in February, given the potential uncertainties of COVID-19 pandemic, we guided the market that our overall revenue growth rate would be negatively impacted for the March quarter, and that some of the businesses, such as China retail marketplaces and local consumer services, might show negative revenue growth. I'm pleased to report we delivered better than expected March quarter results. The government took effective measures to limit the spread of the virus through lockdowns, social distancing measures, and travel restrictions. With the virus spread under control in China, these restrictions started to ease in early March. This led to a recovery of supply chain and logistics delivery capacity.
This, in turn, enabled a quick recovery for our China retail marketplaces and improving fundamentals for local consumer service businesses. For our China retail marketplaces, Tmall online physical goods GMV, this is a paid GMV, grew 10% in the March quarter. Although only 10% growth, we did see robust demand of FMCG and consumer electronics categories as home-bound consumers cooked at home and upgraded their home appliance and 3C products. These two categories combined grew 25% on our Tmall platform. On the other hand, discretionary product categories such as apparel and accessories, home furnishing, and auto parts experienced negative growth. Starting in April, Tmall online physical goods GMV saw strong growth, a strong recovery, and has continued to further improve in May. Local consumer services recorded 8% decline in revenue this quarter, reflecting mass closures of restaurants and local merchants.
However, social distancing measures also led to increased demand for groceries and other daily necessities. Starting in April, GMV growth of food delivery businesses, Ele.me, turned positive as lockdown measures eased. Restaurants began reopening, people began returning to work in China. For our international commerce business, which represents around 7% of total in fiscal 2020, the timing and pace of recovery is still uncertain, as demand in countries outside China may be further impacted by COVID-19. Let's just take a look at the March quarter financial highlights. Our total revenue was RMB 114 billion, grew by 22% year-over-year. The increase was mainly driven by growth of China commerce retail business, especially new retail businesses in grocery category and cloud computing. We continue to be successful at expanding product offerings on our platform that cater to the needs of different consumer segments.
The decrease of non-GAAP free cash flow was due to a one-off of our AliExpress payment service restructuring. We had a full disclosure in our earnings release. This is mainly due to the overseas regulation requirement change, and that AliExpress began the process of a restructure so that it no longer holds the consumer funds before they release to the merchants. If we take that impact out, our non-GAAP free cash flow would have been over RMB 2 billion. Let's take a look at the revenue in details. China commerce retail grew 21%. Customer management revenue grew 3%. The growth on customer management revenue was primarily due to the increase in revenue from recommendation fees and Taobao Live. These new revenue streams partially offset by a decrease in volume of clicks and average unit price per click.
These are the pay click and the PPC I'm talking about is for the search business, P4P. This is impacted because of this COVID-19. Commission revenue decreased 2%, primarily due to effects of the COVID-19 impact. These impacts including cancellation of some orders as a result of logistic disruption in February, weakness in apparel categories, our waiver of annual service fees for the first half of 2020 as part of our support to merchant customers. International retail revenue grew 8% to RMB 5.4 billion. The increase is primarily due to the growth of Lazada and Trendyol and partially offset by the exclusion of revenue from AliExpress Russia, which was no longer consolidated since October 2019. We have a JV in Russia right now. Cainiao revenue reached RMB 5 billion, growing at 28% year-on-year.
This was primarily due to the increase in the volume of orders fulfilled from our fast-growing cross-border and international commerce retail business. Our local consumer service experienced a negative growth this quarter I just talked about. For Ali Cloud, it's still growing strongly at 58%. Let's take a look at the March quarter cost trends. Cost of revenue, excluding SBC, was 62% of revenue. The increase was primarily due to a revenue mix shift towards direct businesses, the new retail businesses such as our new retail, and also consolidation of Kaola, and partially offset by decreasing delivery costs of our local consumer services. Let's turn to segment profitabilities. Our marketplace-based core commerce, adjusted EBITA, reached RMB 34 billion, decreased to 2%.
Core commerce adjusted EBITA grew 2% to RMB 28 billion, which is because of the New Retail, Freshippo, Cainiao common initiatives developed compared to prior year, driven by ongoing improvement of China logistics network, higher demand for fresh goods, and the lower variable costs required for our local consumer service business. I would like to mention about the innovation initiatives. When you look at their adjusted EBITDA loss was RMB 3.1 billion , which is up from RMB 1.9 billion from a year ago. The increase is primarily due to our aggressive investment in DingTalk to provide remote work collaboration capabilities to enterprises and schools free of charge during the COVID-19. As a result, daily active user on DingTalk achieved a four-fold increase to over 100 million. The peak DAU is about 155 million.
March quarter other financial metrics, the share of results of equity investee in the quarter reached RMB 3.5 billion. The year-over-year increase in share of results of equity investee was mainly due to our share of profits in Ant Financial in December quarter, as we take its profits in one quarter lag, partially offset by decrease in our share of results of Suning. March quarter GAAP to non-GAAP net income. The GAAP net income attributed to shareholder was RMB 3.2 billion. The year-over-year decrease was primarily due to net loss in investment income, mainly reflecting decreases in the market prices of our equity investments in publicly traded companies compared to net gain recorded in the same quarter of 2019. Non-GAAP net income attributable to shareholders increased by 12% to RMB 25 billion . Let's look at the fiscal 2020 full-year results. GMV.
As Daniel mentioned, the Alibaba digital economy achieved an important milestone of $1 trillion GMV target. You probably remember that this is the target we committed to do five to six years ago. User growth. Annual active consumers in China reached 780 million, including 726 million are China retail marketplaces. In other words, one out of every two Chinese are buying on our platform. 780 million of annual active consumer in China accounts for around 85% and 40% of the Chinese population in developed and less developed areas. Our ability to attract users at a rapid pace reflects not only the diversity of product selection, but also the platform has become an everyday destination for entertainment and discovery of new trends. We continue to achieve strong revenue growth across all businesses, including core commerce, cloud computing and other business. Total revenue grew 35% to RMB 510 billion.
Talk about the profitability. In the last 12 months, we grew adjusted EBITDA by 28% to RMB 137 billion and generated RMB 131 billion in non-GAAP free cash flow. This is significant firepower for our long-term growth. Let's turn to our business segments. All of the revenue we talked about for each sector shows strong growth. When you look at their adjusted EBITDA, profits for the core are still growing strongly. The investment areas that these businesses who are in the investment stage are progressing very well and loss gets narrowed. Okay. I would like to talk about our outlook, but before that, I want to address the recent bill passed by the U.S. Senate called the Holding Foreign Companies Accountable Act.
The proposed legislation would essentially prohibit a foreign issuer from being listed on a U.S. stock exchange if the U.S. Public Company Accounting Oversight Board, this is PCAOB, is unable to inspect all the work papers of the issuer's auditors for three consecutive years due to certain reasons. We are closely monitoring the development of this bill, and I think it's important for investors to understand Alibaba's practice and issues raised under this proposed legislation. First, there is an existing framework of the PCAOB for its conduct and inspection of audit companies with Chinese operations. In this regard, we understand that there has been ongoing dialogue among the Big accounting firms, Chinese securities regulator, the CSRC, SEC, and PCAOB, with respect to the types of information that are permitted to be exchanged on issuers with Chinese operations while maintaining compliance with Chinese laws.
Number two, Alibaba's financial statements are prepared in accordance with U.S. GAAP. Since our inception in 1999, we have been audited by PwC Hong Kong. PwC Hong Kong is the local affiliate of the worldwide PwC firm, and its auditing standards are overseen by the PwC national office in the United States. The integrity of Alibaba's financial statements speaks for itself. We have been an SEC filer since 2014 and hold ourselves to the highest standard of transparency. Each year, we have received an unqualified audit opinion on our financial statements from PwC. Third, trust is one of our core values, and transparency and integrity are essential components of building trust with all of our stakeholders. All these years, we have consistently aimed to grow the business for long term, maintain compliance with all applicable laws, and delivered value for our customers, employees, and investors.
Investors who bought our stock in 2014 IPO have tripled their investment over the past 5.5 years. Given the above, we will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges. Looking ahead, despite a challenging quarter due to pandemic, we achieved our guidance of over RMB 500 billion in revenue and delivered healthy, sustainable profit growth in fiscal year 2020. The reason we have been able to deliver these results is that we sowed seeds years ago by investing in technology, in innovation, and in businesses that required foresight and long-term patience. Today, the Alibaba digital economy remains strong and growing. Looking ahead, we will continue the same strategy of delivering robust revenue growth and sustainable profit growth.
Although it is difficult to predict the uncertainty of global economic and geopolitical developments, based on our current view of Chinese domestic consumption and enterprise digitization, we expect to generate over RMB 650 billion in total revenue in fiscal year 2021. We believe a commitment to invest and deepen our value proposition to customers, thereby ensuring robust revenue and profit growth. That concludes our prepared remarks. Let's open for Q&A. Thank you.
Thank you, Maggie. Hi, everyone. For today's call, you are welcome to ask questions in Chinese or English. A third party translator will provide consecutive interpretation for the Q&A session. Our management will address your questions in the language you ask. Please note that the translation is for convenience purpose only. In the case of any discrepancies, our management statement is in the original language. Operator, I'd like to open it up for questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session.
Operator.
If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Once again, to give more people the opportunity to ask questions, please keep yourself to no more than one question at a time. Once again, if you wish to ask a question, please press star one on your telephone. Your first question comes from the line of Binnie Wong from HSBC. Please ask your question.
Hey, Daniel, Maggie, Rob. [Non-English content]
Thank you Daniel, Maggie and Rob. My question is regarding your strategy in lower tier cities. I know that last week you issued a new release, a new patch release for Taobao, providing new support for merchants, as well as other new features. 70% of the uptake for that new patch release has in fact been from the lower tier cities. Could you please speak to us about your strategy going forward for the lower tier cities?
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Thank you. I will take that question. Given the size and the scale of Taobao, as a retail platform and where it's at today, 700 million. The fact is that we've penetrated all segments of the market from the high end down to the low, and the increase in the user base over the past year, 70 million, 70% of that came from the lower tier cities.
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Thank you. What we're doing in the lower tier cities is deploying a more diverse and broad range of different services, including on Taobao, with more value for money offerings as well as live streaming and other kinds of engagement that are targeted for those users, especially those who are looking for good value for money. As you've noted, we have a new special price edition of Taobao, which is targeted for those users in lower tier cities with a focus on giving them value for money offerings.
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At the same time, we see significant potential for further growing our user base. The current figure for annual active consumers, 780 million, represents only 45% penetration of the population in lower tier cities and in the rural areas of China. There still is lots of room to grow in those regions, and we intend to do so together with Alipay in driving a digitalization strategy in those areas that will convert people into consumers. Thank you.
Thank you. Our next question comes from the line of Eddie Leung from Bank of America. Please go ahead.
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Thank you. My question is regarding the long term impact of live streaming on the industry and in particular celebrity host and KOL live streaming. The question is if merchants need to pay these celebrities, these KOLs, will that impact on the profitability of platforms going forward?
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Thank you, and that's a really good question. What we're seeing really is the emergence of live streaming as a new kind of sales methodology or a new kind of sales channel. With the emergence of these KOLs and celebrity influencers online, the role that they're really playing in the context of retail is sales. They're serving as salespeople, and they make money by way of a sales commission. In the long term, how this trend will play out, I think really comes down to whether the intrinsic commercial value, in terms of having online influencers and KOLs do live streaming, be fully captured in an efficient and effective way. If you have a one-off sales event with a celebrity influencer, you get a user to make a one-off purchase, fine.
The question is, can you then keep that user in the long term and continue to market to them and get the full value out of that relationship? I think it's important if you're paying money to these online influencers or celebrities, that in part, that's about supplanting existing channel costs and saving costs there. More importantly, it's about getting the new consumer into your ecosystem so they can become a long-term consumer. This is critical to Alibaba because we are a diversified ecosystem with multiple channels and formats for engaging consumers. That's precisely what we're looking at doing with these kinds of live streaming approaches. It's just one part of an overall integrated approach through which we hope to develop those long-term relationships and create long-term value.
Okay. Next question.
Thank you. Next question comes from the line of Piyush Mubayi from Goldman Sachs. Please go ahead.
Thank you for taking my question. I have one question with regards to the guidance you provided for next year. What are the drivers of that growth assumption or guidance you provided? In particular, what are the underlying macro assumptions you've made? More generally, the platform mix that you're likely to see that's underpinning that guidance. Thank you. I'll go back to the queue afterwards.
Piyush, this is Maggie. Let me try to answer your question. We all know that we're facing risks and uncertainties, right? Many of which we're not able to predict or control. Whether there's going to be a second wave or when will the vaccine come, how much impact will the geopolitical issue bring? It's hard for us to factor in. The guidance we give basically reflects assumptions that we believe to be reasonable today. Dan, you talked about the recovery speed of each of our businesses, and particularly for China retail, local service, and international business, et cetera. Based on what we've seen today, and we see this quarter- to- date, transaction volume and also user activity, et cetera, has already experienced a growth at a similar rate to the December quarter level. That's a basic assumption that we used.
You mentioned about 1P, 3P. You can see from our revenue breakdown, for the 2020 fiscal year. 1P business as a percentage of the total revenue already went up to around 16%-17%. We believe that percentage is going to continue to go up, but not radically. The important thing is that people are thinking about, you know, your revenue comes a bigger portion of 1P. But 1P anomaly represents, you know, a low margin. But look at our profit growth. I think this is another point I want to make is that we are a group that has such a strong growth for the core, and also as a multiple engine, not only Taobao, Tmall, China retail marketplace, but also cloud, new retail, local services, logistics.
So strong revenue growth brings in, you know, the power for us to invest in those strategically important areas, and these investment areas, they are doing better and better, which reflects into our office growth. Sorry, interpreter, I gave a long answer.
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Next question please.
Thank you. Next question comes from the line of Alex Yao from JPMorgan. Please go ahead.
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Thank you. I noted in the early remarks, your comments about advertising revenue in the first quarter performing well, driven by good performance of recommendation feeds. In that context, I'd like to ask about your plans for monetization of recommendations. I imagine that in your answer, you'll talk about the need to balance the interests of merchants against the desire for monetization. Given that, perhaps I could go ahead and just ask the second part of the question. Namely, is there any technical or technological method that could be adopted on the one hand, so as to fully protect the merchants interests or even better serve the interests, while at the same time also providing more opportunity for monetization? If so, is that something that could happen this year?
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Thank you. Well, I'll start with the latter part of your question, and the answer is yes, there is technology that can do precisely that. The technology is AI, artificial intelligence, which can be applied, and we are already working on applying it in a way that can ensure good user experience in terms of balancing advertised content versus free content for users, and also leveraging that technology for merchants to drive better return on their investment. We're working in this direction, and I think we're already making good progress. In general, we are moving forward cautiously in working on growing revenues from recommendation feeds, and it is our hope that we can find ever better ways to do precisely what you mentioned in your question, namely finding the best possible balance, leveraging on technology between user experience and creating value for merchants.
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Thank you. I just like to add a couple of points on top of Daniel's already very clear answer. The key word I'd like to add in is multi-engine approach. If you look at our revenue over this three-year period, revenue from CMR and commissions accounted for 70% compared against 40%. What this means is that our strategic investments are starting to produce new channels of revenue, new sources of revenue. You can see this in our figures over the three-year period for CMR as well, 90%, and that's down now by 20% to about 70%.
You have all of these different new revenue areas that can be tapped into, including recommendations that we've talked about, but also live streaming, also Xianyu, and many other new sources of revenue. Thirdly, and in conclusion, going forward, yes, we will continue to, as we said on Investor Day, to take a prudent approach in moving forward with monetization.
Thank you. Our next question comes from the line. Thomas Chong from Jefferies. Please go ahead.
Hi, good evening. Thanks management for taking my questions. My question is more about the spending power of the buyers post-virus. Can management comment about the overall spending power of consumers these days? With that, can you comment about the trend in ASP and order frequency that we would expect as people speeding up the migration to online? Thank you.
[Non-English content]
Okay, let me answer this question. First of all, I think our platform we are such a huge consumer platform, we have different tiers of consumers around us. What we see is that consumers, they engage with us and find what they want in different categories, in different pricing range. We do see some our [shift] of the product categories in this quarter up because of the pandemic. For example, we see a very strong growth of food and groceries business, because when people stay at home, they have to cook at home, they are unable to go to the restaurant, so they need more food and more groceries, which are all daily necessities. That's why we see very strong growth in our FMCG categories and food categories.
Our FMCG categories grow, like take example, starting from the new fiscal year, our FMCG categories in Tmall grow nearly like, I remember 40%, around 40%, which is a very strong indicator that people spend more on our platform in these categories. Well, because of the pandemic, people spend less on apparel, like fashion, because people wear face masks and they don't even need makeups. I think the spending is still there, but the focus are quite different. In terms of the spending power, I would say China is a famous high saving rate country, and we do see people remaining a very strong consumption power to maintain their lifestyle. So far we haven't seen any big change in terms of the consumption power. As I said before, I think the product categories, they try and we do see some difference.
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[Non-English content ] Let me clarify one point. When we talk about beauty, what we see is like skincare still remains very strong. For makeup, because as I said, when ladies wear face masks, the needs for makeup are getting lower. That's the specific situation.
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Next question. Operator, next question.
Thank you. Our next question comes from the line of Jason Helfstein from Oppenheimer. Please go ahead.
Thank you. I just want to go a little bit deeper into that last point. You said that online physical goods GMV grew 10%, and then you did break down that you saw 25% in these categories that benefited or were more COVID-19 related, offset by areas where they didn't spend money. What do you think is more reflective of the consumer health? Is it that 10% number? Or really is it that 25% and consumers have the ability right now to spend more, they are just not because they don't need the items, consistent to what you talked about not needing makeup if you're wearing a mask, for example. Maybe talk about how that relates to your outlook for the next quarter. Thank you.
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Okay, let me answer this question. As we said before, our Tmall grow like 10% in the March quarter. In Tmall, we have our FMCGs and our consumer electronics. The combined growth rate in March quarter for these categories on Tmall was about 25%. If you want to get a big picture of the future development, I think in my remarks, I give you a very clear latest indicator, which is starting from the new year on the quarter to date. Overall speaking, our China retail marketplace growth rate is similar to those in December quarter. I think that's basically the big picture of where we are today. All people understand that there are still uncertainties about containing the pandemic. We are closely monitor the situation.
We strongly believe that the consumption power in China still very strong, that we will take our advantage in the digital platform to continue our leading position.
Next question.
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Yes. Let me add one more point, which is if you look at the past fiscal year, we generate $1 trillion GMV in our Alibaba ecosystem. If you look at our China retail marketplaces, the GMV we generate last fiscal year is about RMB 6.5 trillion. If we look at what happened in the March quarter, I think. We should have achieved a higher GMV if without this pandemic, obviously. We are very confident that in the new year, I think we will achieve another net add of at least RMB 1 trillion GMV in our China retail marketplace, which is, I think, still a very strong number compared to the size of our business in China.
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Next question.
Thank you. Next question comes from the line of Gregory Zhao from Barclays. Please go ahead.
Daniel, Joe, Maggie, Rob [Non-English content]
Thank you, and congratulations on the strong performance. My question relates to cloud services. We know that internationally, players like Microsoft and Google, who have already achieved significant scale in terms of the size and the revenues, continue to be able to maintain rapid growth in their revenues and even acceleration. Looking at China, however, in the cloud space, Alibaba and its competitors seem to be seeing a different trend where things are somewhat slower. I'm wondering if you could compare for us, please, the China market versus the international market for cloud. What are the differences underlying that picture, and what are the short-term bottlenecks? How would it be possible potentially to make a big leap forward in terms of accelerating revenue and profit growth in cloud?
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Thank you. Well, first I'd like to say that in the past year, Alibaba Cloud Intelligence hit a very important milestone, namely reaching revenue of RMB 40 billion, and even in the March quarter achieving 58% growth. We don't see a slowdown at all. Conversely, we think the growth is good.
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We see this growth coming from several different areas. One is the demand across all sectors of the economy to get onto the cloud. If you look at Chinese IT spending in the future, we can expect to see more and more spending going forward as organizations get themselves on the cloud.
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The second thing I would point to is that the cloud is not just a way of providing infrastructure on the cloud to lower IT related operating costs. It's also an opportunity for companies to leverage on big data and cloud-enabled computing capacity to achieve better efficiencies and drive value for the business. Different kinds of algorithms and analytics will be developed in the cloud for different sectors, for different verticals, different product solutions to meet those needs and unleash new value for them. It's not just about saving costs on IT infrastructure, it's about driving value as well.
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In Ali, the value proposition that we offer is cloud plus intelligence. We're not just about providing cloud services, it's a combination of cloud plus intelligence. Now, in different countries, cloud services are defined differently. It's true in China and internationally as well. There are different definitions. To us, if it's just about shifting traffic onto the cloud to save costs, that's kind of a low value-added offering, and that's not really what Alibaba is about. We're looking at focusing on higher value-added cloud-enabled offerings that can truly create value for clients in different sectors.
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Finally, on your question as to the differences that we see in the Chinese cloud market versus the cloud market overseas, I would say that in the U.S. and in other more developed markets, the SaaS and the whole ecosystem developers are more mature already. Whereas in China, that developer ecosystem and SaaS is just starting to get going. Alibaba very much looks forward to partnering with developers to jointly create a very robust ecosystem in China.
Okay. Next question.
Thank you. Next question comes from the line of Alicia Yap from Citigroup. Please go ahead.
Hi. Good evening, management. Thanks for taking my questions. Congrats on the strong results. My question is on, if you could give us some colors that are on the subsidy measure that you help provide merchants, do you think that is actually more effective to the commission rebate or merchants actually prefer more free traffic? Given recommended fees are actually becoming quite effective for merchants. Does that mean over the next few quarters, we don't have to provide more preferential commission rate over time, or is that is a separate thing? The CMR and commission growth direction will still be a bit diverged. Thank you.
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Alicia, let me first answer your question. I think, first of all, we are trying to help our merchants, especially SMEs, during this pandemic. First of all, we have to give a very fair and transparent policy to all the merchants on our platform. That's why we decided to use the subsidy to waive the annual fees and also give some reduced commissions in some of our business. This is applied to all the merchants on our platform.
In terms of the free traffic, this is a very interesting question. I would say when we decided to give this support to the merchants, we have to consider the user experience on our platform because we are a marketplace. We are platform model. We have to consider the interest of both merchants and consumers. If we give free traffic to certain merchants, I think their conversion rate, their click-through rate of the product may or may not be good enough to the customers. That's why we don't want to do this one-side effort. We have to ensure a good user experience on our platform. At the same time, we want to subsidize our merchants to relieve their financial pressure. That's how we think about these policies.
Let me just supplement a little bit, Alicia. For the subsidy and preferential commission rate, these are two separate things. Subsidy, we're talking about waiving of merchants' annual fee on Tmall platform. That's a support during COVID-19, to help them to go through this difficult time. This preferential commission rate is an ongoing effort that we have this practice all through the years. Talk about either subsidy or preferential rate, I think our operational philosophy is that we're not a believer of just burning money to grow the GMV. We believe that whatever investment we make, it should be supporting the sustainable growth rather than just burn and throw away the dollars. If you look at our profitability, this year, we're talking about somewhere over RMB 140 billion, and we have $50 billion cash in our account. There are money to invest.
We are emphasizing on helping merchants in an efficient and effective, and sustainable way. Thanks.
Operator, one last question.
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Our final question comes from the line of Mark Mahaney from RBC. Please go ahead.
Thank you very much. If you were to talk about the biggest structural changes you think that will occur to your business or to the digital economy because of the COVID-19 crisis, what would you say they are? You highlighted increased shopping for groceries online, but including that, other things, just step back, what do you think are going to be the biggest structural changes, permanent changes, in the way that consumers around the world interact digitally because of this crisis? Thank you very much.
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Okay, I think on top of the new category penetration like in the food and groceries, the other very important change is the education and the penetration in the customers who are not very experienced internet user or online shoppers before COVID-19. For example, what we see is that during the pandemic, many older people, they move to online and buy everyday needs. It's not only about the category penetration, it's also about the user penetration. We do see this change the lifestyle of many people. The second thing is not about consumption, it's about change the way of working and change the way of education.
That's why in my remarks, I said that our DingTalk experienced a very, very robust growth during the quarter, because they become a very important platform for working people to stay connect and to improve the working efficiencies. For students and schools, DingTalk become a very efficient platform for online classroom. I think this is all about change of the lifestyle, change of the way of working, change of way of education. These are very fundamental changes. I will say this will stay ever, I mean even after the pandemic.
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Okay, thanks everyone for joining the call today. If you have any further questions, please feel free to contact the Alibaba IR team. Thank you very much.
Thank you.
Thank you.
Thank you. Ladies and gentlemen, that just conclude our conference for today. Thank you for participating. You may all disconnect.