Good day, ladies and gentlemen, and thank you for standing by. Welcome to Alibaba Group September Quarter 2014 Results conference call. At this time, all participants are in listen only mode. After management's prepared remarks, there'll be a Q&A session. I would now like to turn the call over to Jane Penner, Head of Investor Relations of Alibaba Group. Please go ahead.
Good day, everyone, welcome to Alibaba Group September quarter 2014 earnings conference call. With us today are Joe Tsai, Executive Vice Chairman; Jonathan Lu, Chief Executive Officer; Daniel Zhang, Chief Operating Officer; Maggie Wu, Chief Financial Officer. Also, as you know, we distribute our earnings release through Alibaba Group's investor relations website located at www.alibabagroup.com. Please refer to our IR website for our earnings releases as well as the supplementary slides that accompany the call. You can also visit our corporate website for the latest company news and updates. This call is also being webcast from our IR section of the corporate website. A replay of the call will be available on our website later today. Now, let me quickly cover the safe harbor.
Today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve inherent risks and uncertainties that may cause actual results to differ materially from our current expectations. Factors that could cause actual results to differ materially are set forth in today's press release. To also understand these risks and uncertainties, please refer to our Form F-1 as amended, originally filed with the U.S. Securities and Exchange Commission on May 6, 2014. 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 non-GAAP EBITDA, including non-GAAP EBITDA margin and non-GAAP net income, are expressed on a non-GAAP basis. We have also adjusted our net cash provided by operating activities to remove purchases of property and equipment and intangible assets, excluding acquisition of land use rights and construction in progress, and adjust for changes in loan receivables relating to microloans of our SME loan business, which we refer to as free cash flow. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. With that, I will now turn the call over to Joe.
Good evening or good morning, depending on where you are. Thank you all for joining. Jonathan , Maggie, Daniel, and I look forward to discussing our business on our first earnings call as a public company. In the quarter that ended in September, which is our fiscal second quarter, I'm pleased to report that we saw continued strong growth across our core operating metrics, which drove our strong financial results. We grew gross merchandise volume across our China retail marketplaces, and we increased the number of active buyers across our ecosystem. As a result of this strong performance, we grew revenue significantly, and we continue to expand our strong position and competitive advantage as the unrivaled leader in mobile commerce across China. Our business continues to perform well, and our results highlight both the strength of our ecosystem and the strong foundation we have for sustainable future growth.
My colleagues will provide you with a more in-depth look at our business operations and financial results. Before they do that, I want to highlight a few of our key growth areas. We grew gross merchandise volume across our China retail marketplaces by 49%. The overall GMV growth of 49% year-on-year is an acceleration from the GMV growth rates achieved in the previous two quarters of 46% and 45%, respectively. One key reason for this strong GMV growth is the continued growth in active buyers. Our platform engages users with strong commercial intent, and you will recall that an active buyer is someone who came to our retail marketplaces to make at least one purchase during the period of measurement. For the 12 months ending September, our annual active buyers increased to 307 million.
Annual active buyers for the year ending in September amounted to a 52% year-on-year increase from 202 million a year ago and continues the strong growth trend we have seen over the last several quarters. The robust growth of active buyers reflects the position of Taobao Marketplace and Tmall as the first and most important destinations that Chinese consumers choose when they embark on a shopping journey, whether they are shopping through their desktop computer or a mobile device. Overall, for context, when you consider 307 million active buyers, this means that a number of consumers that equals almost the entire population of the United States is shopping annually on our China retail marketplaces.
307 million Chinese consumers represents only about half of the Chinese internet user population and less than a quarter of the total population of China. These numbers highlight the significant growth opportunities we have before us. I next want to touch upon an area that I know you are intensely focused on, and that is our progress in mobile commerce. Alibaba continues to be the unrivaled leader in mobile. You are already well aware that Alibaba leads the China mobile commerce market with 86% share of total mobile GMV, according to iResearch. You will also remember that our mobile Taobao app has been and continues to be the most popular mobile commerce app in China by monthly active users in every month for the past two years.
Our reported results today show that our leadership position in mobile continues to strengthen. In September, we saw 217 million monthly active users across our mobile commerce apps, and the most important of which is the mobile Taobao app. This is an increase from the 188 million MAUs we reported for June. This is a net add of 29 million mobile users in just three months. For context, 29 million people is larger than the population of Texas. In the September quarter, we saw $32 billion in mobile GMV, up from $9 billion a year ago, representing more than the tripling of mobile GMV year-on-year. Today, we are reporting that mobile GMV now accounts for 35.8% of our total GMV for the September quarter, up significantly from 14.7% a year ago.
With more than one-third of our China retail business on mobile, Alibaba is very much a mobile company. You look at how much mobile business we do every year, for the 12 months end of September, we saw $95 billion in mobile GMV on our China retail marketplaces. I don't think you can find another company in the world that drives $95 billion in consumer retail transactions through their mobile apps. Maggie will address mobile revenue in more detail, we are reporting today that 29% of our total revenue across our China retail marketplaces is now being derived from mobile. This shows significant growth from the prior quarter that ended in June, when we had 19% of our revenue being derived from mobile.
Looking at the year-on-year comparison, mobile revenue in this quarter represents a more than 1,000% increase from a year ago. As we have said many times, we don't manage the business by take rates. Having said that, we have decided to break out mobile take rates for your analysis in order to bring more transparency into the progress we're making in monetizing our mobile transactions and traffic. The mobile monetization rate, which is mobile revenue divided by mobile GMV on our China retail marketplaces, increased to 1.87% in September quarter. This is a meaningful improvement from the 1.49% from just a quarter ago. We're clearly seeing sustainable progress in how we monetize mobile.
That is because consumers who come to use our mobile apps to shop for goods and services have clear commercial intent, and we are able to effectively convert that commercial intent into purchases. This benefits our merchants and increases their appetite and propensity to allocate more of their marketing dollars to our mobile interface. Looking ahead, we believe that the continued trend towards mobile provides us with a unique advantage to deliver a better consumer experience as well as more value to merchants. Because of the higher frequency of shopping through our mobile apps and more personalized and location-based data we can use to deliver a highly targeted experience, we believe the value of our ecosystem will continue to be enhanced by the consumer shift to mobile. Taken together, the results we're reporting today show our strong foundation for future sustained growth.
I'd now like to turn the call over to our CEO, Jonathan Lu, who will provide more color on our business for this quarter. Jonathan.
Hi. Thanks, Joe. Hello, and welcome to our first earnings call. Joe gave a good overview of the progress we have made in our key operating metrics, and I want to give you a sense of how we achieve these results. Namely, what we are doing to drive GMV and active buyers. Let's start with the GMV growth. Tmall GMV continues to grow extremely well, but in the September quarter, Taobao Marketplace grow faster year-on-year than in the past three quarters. A clear acceleration of a very large business. This acceleration was due to a number of factors. First, we have made several product changes on Taobao to improve our buyers' experience, including a new recommendation engine based on data. Search results are now more personalized, which increase conversion rates.
Second, we have promote new categories that are growing fast, including furniture and decoration, car accessories, household products, sports gear, and baby maternity. It's clear from the list of categories that our buyers are beginning to live at Alibaba. Taobao is now a destination that can meet every imaginable need. Of course, GMV growth is fundamentally driven by our ability to attract and retain active buyers. Our extremely popular mobile Taobao app has been one important source of new buyers on our platform. We have recently added features to increase usage of the app, including our express sales and encourage mobile buyers to return several times a day. In addition, more buyers from smaller cities are using our retail marketplace every year.
Even though these new buyers initial transact less than buyers from first-tier cities, we believe they will be an important engine of GMV growth in the future. In general, our data suggests that the longer a buyer stay on our platform, the more they spend across a greater variety of categories. I want to mention a few highlights from our long marketplace business. We make good progress in our cloud computing business this quarter. At our Aliyun Worldwide Developer Conference in Hangzhou, we host more than 10,000 developers and partners from around the world. Cloud computing put more small business on the same playing field as big corporations. AliCloud is helping SMEs to start build lasting and sustainable companies. I also want to let you know that we are set to integrate our newly acquired business, UCWeb and AutoNavi.
Both bring crucial strategic advantage to Alibaba, namely mobile browsing and mapping products. The business leader of UCWeb, Yu Yongfu, has joined our senior leadership team, and we feel very lucky to have him. I want to call your attention to Double Eleven, an important day for Alibaba and a shopping and societal phenomenon for China. At Alibaba, we are proud we have created an ecosystem that has revolutionized the China retail landscape in service of the little guy. Double Eleven was start in 2009 for merchants and consumer during the seasonal changeover, filling a major gap in the traditional offline retail calendar in China. In 2013, Double Eleven achieved a milestone of surpassing Black Friday and Cyber Monday combined in online GMV. This year, Double Eleven will expand its scope to include cross-border retail for the first time ever.
This is in response to the increasing appetite around Chinese consumer for imported goods from foreign brands, as well as the ability by China's small businesses to provide quality products among global consumers. On this day, you truly see Alibaba's ecosystem at work. Our robust technical infrastructure, scalable logistics network, and the magnitude of the active participants and what is shared on our platform. We'll hand off to Maggie, who will walk everyone through our financial performance in the quarter.
Thank you, Jonathan. Hello, everyone. Joe and Jonathan discussed our key operating metrics in the September quarter. Now I'll walk through the details of monetization and our financial performance. First, the highlights. GMV grew 49% year-over-year to RMB 556 billion, it was up 11% sequentially. Revenue grew 54% year-over-year to RMB 16.8 billion, it was up 6.7% sequentially. Our blended monetization rate was steady at 2.3% versus 2.21% a year ago. non-GAAP EBITDA margin was 51%, down from 59% in the year-ago period. I'll dig into the details on this in a few minutes. By the way, the non-GAAP EBITDA was also called adjusted EBITDA. Same thing.
Non-GAAP net income grew 16% year-over-year to RMB 6.8 billion. Non-GAAP diluted EPS was RMB 2.79, an increase of 9.4% compared to RMB 2.55 in the same quarter of 2013. Moving on to monetization. I want to make it very clear that we manage the business to promote growth in GMV and active buyers, not to maximize our own monetization rate. We view monetization rate as merely an output of our success in driving GMV, active buyers, as well as improving the customer experience and their return. That said, we are monetizing our GMV very well. The blended monetization rate across PC and mobile devices is stable at 2.3%, consistent with prior years.
This blended rate is lower sequentially due to strong GMV growth on Taobao Marketplace, where GMVs are less monetized since it's literally still a free marketplace. As Joe noted, our performance in mobile this quarter has been particularly strong. The mobile monetization rate increased to 1.87% from 1.49% in June quarter and from 0.61% in the year ago period. Our mobile monetization rate is now 74% that our PC monetization rate. Year-on-year, our revenue grew 54%. We got a small revenue tailwind from consolidating UCWeb and AutoNavi.
Even without revenue from these new businesses, our revenue growth this quarter would have increased 48% year-on-year. As you can see from the chart detailing the revenue growth of our major businesses, we have strong growth across all the business. Before diving into details of margin, let me be very clear that we do not manage to a margin target. Instead, we have made and will continue to make strategic investments to grow our revenue and improve profit dollars and to strengthen our ecosystem for long term. In the September quarter, lower non-GAAP EBITDA margin was largely driven by reinvestment made in the following areas as planned. Number one, consolidation of newly acquired businesses, mainly UCWeb and AutoNavi. Number two, investments in new initiatives, including our mobile operating system, local services, and digital entertainment.
Number three, tactical brand marketing to promote our China regional marketplaces during this quarter, where intense global interest in Alibaba Group enhanced the effectiveness of marketing campaigns. We're now providing margin, we are not providing margin or expense guidance, but our overall view is that our core business and cash flows are very healthy. We have the luxury to continue to invest in new initiatives, such as category expansion, including digital entertainment, multi-screen strategy, et cetera, and other efforts to attract new users to improve engagement and user experience and to extend our products and services. Now let's talk about our operating expense. Pre-SBC cost of revenue was RMB 4.4 billion. Pre-SBC operating expense was RMB 4.5 billion. Pre-SBC product development expense was RMB 1.9 billion. Pre-sales and marketing expense was RMB 1.6 billion.
Pre-SBC general and admin expense was RMB 978 million. Sales and marketing expense increased largely due to brand expanding to promote our group businesses during this quarter, when intense global interest in Alibaba enhanced the effectiveness of marketing campaigns. Additionally, the consolidation of marketing expense in acquired businesses, as well as an increase in spending on new business initiatives, contributed to the increase of sales and marketing expense in this quarter. Our adjusted effective tax rate was 17.6%, up slightly sequentially. We also generated RMB 8.9 billion of free cash flow in the September quarter. CapEx expenditures was RMB 3.4 billion, an increase from RMB 1.1 billion in the year-ago period and RMB 1.3 billion in the June quarter.
The sequential CapEx increase was due to the purchase of land for office space, and the cost of the land was around RMB 1.4 billion. A non-real estate CapEx increase due to the investment in AliCloud and our data platform, as well as non-real estate CapEx acquired by UC and Auto [audio distortion]. Our cash and cash equivalents position as of September quarter is very strong at RMB 88 billion. In addition, we have RMB 21.8 billion in short-term investments. That's all for our prepared remarks. Now let's open the floor for questions.
Thank you. Ladies and gentlemen, if you'd like to ask a question, please press start, then one on your touchphone or telephone. If your question has been answered and you wish to move yourself and the queue, please press the pound key. Again, to ask a question, please, press star, then one. To give more people the opportunity to ask a question, please keep yourself to no more than two questions at a time. Our first question comes from Alex Yao from J.P. Morgan. Your line is open. Please go ahead.
Hi, good morning and good evening, everyone. Thank you very much for taking my question, and congratulations on a very solid quarter, as the first as a public company. My first question is about the monetization rates. Can you comment what is driving the improvement of the mobile monetization rate during the quarter? Is there any one-off event attributable to the increase, or you guys drive a lot of sales modeling effort to drive the merchant adoption? Secondly, on the PC monetization rate, if my calculation is correct, it seems to decline a little bit compared to the same period last year. Why did the PC side decline? Thank you.
Okay, I will take this question. For the mobile monetization rate, I think the key reason for the increase in the mobile monetization rate is that the continued increase of the mobile traffic. Because today, more and more Chinese people, they get used to shopping online by mobile device. On the other hand, when our merchants witness the behavior change, today, they are spending more money on the mobile side to bid for the keyword and buy the online marketing services. I think these are the key reasons for the increase in mobile monetization.
Yeah, Alex, this is Maggie. The in terms of the PC take rate, it is lower than previous quarter, slightly. The reason is that we have a very strong GMV growth on Taobao Marketplace. If you look at the growth rate, it actually accelerated compared with previous quarters. The Taobao Marketplace GMVs are relatively less monetized since it is still literally a free marketplace. So that is the reason. Having said that, we manage business to promote the overall growth of GMV active buyers. Really take rate is just the output, is the result. We look at PC and mobile as integrated marketplace.
Got it. That's very helpful.
Thank you. Our next question comes from Alan Hellawell from Deutsche Bank. Your line is open. Please go ahead.
Fantastic. Thank you very much for taking the question. Again, congratulations on your first quarter out of the gate. I had a question about the interplay between commissions and marketing services revenues. If I'm not mistaken, commissions in the quarter may have doubled year-over-year, and marketing services may have risen by a bit more than 30%. I was wondering if you could just give a little bit of color as to what the drivers were between these different trajectories, whether you do it as a function of PC or mobile, but get some color there. Would simply love to get a refresh on how you are contemplating your M&A strategy over the next couple of quarters. Thank you very much.
Yeah, Alan , I'll take the commission versus online marketing revenue question, and then I'll [audio distortion] to Joe talk about M&A strategy. Yes, you're right. Actually, commission revenue grow faster year-on-year than the online marketing revenue growth. As we disclosed in the announcement that our retail revenue consists 33.5% commission revenue in the quarter, compared to 24.8%. The reason for to relatively slower growth in the online marketing is pretty much the same reason as the when we talk about PC take rate, because Taobao GMV grows so much faster.
When you look at a PC versus mobile GMV mix, Taobao has a higher PC GMV percentage than in Tmall. As I said, Taobao is relatively less monetized. That's the impact which resulted in a, you know, kind of a slower growth. Not really slower, but just compared to the much faster growth on the commission.
Great. Hey, Alan, how are you? This is Joe . Thanks for the question on M&A. You know, you asked about M&A strategy for the next couple of quarters, but I think we always look at M&A as a long-term strategic thing. The horizon is much longer than the two quarters. And the kind of criteria that we use in terms of making investments and acquiring companies is that, number one, we always like, you know, opportunities that will help us add more users and also additional engagement of these users in terms of converting them into e-commerce users. Number two, we are always interested in improving customer experience.
For example, we have previously said, you know, we have a partnership with the higher logistics business where we have both a commercial relationship on logistics as well as an equity relationship to bring the two companies closer together in order to bring better logistics service to the large appliance category. That has worked out really well for us. Number three, we're always interested in adding additional product and service categories that will enhance our position in terms of getting the consumer's wallet share. That's, you know, what we're looking at in terms of the strategy.
Thank you.
Yes. I just want to add a little bit to the Taobao GMV growth, because I keep saying that it grows faster. There are reason behind, and we see this as very positive because Taobao is our core traffic engine and the critical source of eventually, you know, monetize for all of our marketplace, including Tmall. So we have been making a lot of efforts to grow the GMV in Taobao Marketplace.
Thank you. Our next question comes from Angela Moh from Morgan Stanley. Your line is open. Please go ahead.
Hi. Thanks. Again, congratulations on the results. Just a couple questions from me. On the average spend, if we just take the number of buyers and kind of back out the average GMV per person or per buyer, that's kind of down about 2% year-on-year. I mean, is that something that you guys are worried about or 'cause you mentioned that the number of categories of new products have actually increased. Maybe you could comment a little bit on that. The second question is more on the recent announcement about the investment of about, I think, RMB 10 billion over five years on the Taobao Village. Could you also maybe give us a little bit more color on timelines?
Right. Yeah. The second question, the line is not that good. Could you please repeat the second question, Angela?
Sorry. The second question is recently we saw an announcement about investment of I think about RMB 10 billion over five years on Taobao [non-English content], right? Going down into the rural village and setting up these stations.
I see.
Could you maybe comment a little bit more in terms of the execution of this?
Yeah. Okay. I'll answer, the first, you know, the GMV per buyer question, then Daniel will answer the rural one. The slight decline of this so far for GMV per annual active buyer does not really worry us. It just, you know, slightly decreased due to the significant growth of the new buyers in the past year. As you could recall, you know, we have been talking about the rule on our platform is that the longer consumer stays, the more they spend annually. Normally the new buyers, their spending level are relatively lower, but will catch up as they buy from more categories and the number of orders.
If you really break it down rather than look at the blended average of that spending level, we do see that trend.
Hi, this is Jonathan. I'll take the second questions. Right now, there is 34% of the Chinese people in urban area use the e-commerce, but only 9% of Chinese people in rural areas use e-commerce. This is a big. We consider this is a big opportunity for long term. Our vision is that we'll enable the farmers to sell their farm products to city people and globally. At the same time, we encourage Chinese 600 million farmers to buy online from Taobao. This is a long-term view.
Thank you. Our next question comes from Dick Wei from Credit Suisse. Your line is open. Please go ahead.
Hi, thank you for taking my questions, and congrats on a strong quarter. My first question is on Alitrip. Wonder if you have any updated strategy or investment plans or any area of focus for the Alitrip new subsidiary. I think the other side, the other questions I have maybe are in terms of the other income line. I suppose this mainly comes from the Ali, I guess from Ant Financial. Wonder any kind of sense or directionally, how does the margin trend coming along from the Ant Financial side or any details we can have? Thank you.
Okay. This is Daniel. I will take the first question about travel. Actually last, or late last month, we just re-launched a new brand name of our travel business. The purpose is quite clear. We believe that travel market is a huge market for Chinese people. Today, if, when we look at the market, we want to launch our services to the Chinese consumers to not only for their for the tourism domestically, but also to bring more Chinese people to other countries. We don't want to do this like other does as a OTA. We will still stick to our platform model. We will try to connect the service provider, the hotels, the airlines, and the sightseeing, connect with end customers directly.
Actually, we made a recently, we made an investment in a Chinese software, ERP company, as a travel ERP company, which is Asia Shiji Group. The purpose is that we want to work with them to connect with the system of the hotels and restaurant to so that the merchants, the hotels and restaurant can supply their inventories on a real time basis. By this way, they can sell their product and service more efficiently.
Yeah. Dick , you got your question about our Small Micro [Finance] Service Group profitability. You can see from our disclosure that our profit sharing from the group is slightly down. The reason behind is that based on our restructure agreement, the 49.9% profit sharing having changed to 37.5%, a bigger pie. Currently, the profit mainly coming from Alipay. Other businesses are still in the very initial stage. One thing I do want to mention about is that the overall Ant, our Ant Small Micro Finance Service Group is still in its very early investing stage, and growing profit is definitely not their priority.
You know, we do not expect very high on the significant profit sharing growth.
Thank you. Our next question comes from Carlos Kirjner from Bernstein. Your line is open. Please go ahead.
Thank you. Two questions. Can you give us some direction on how much more user cohorts have spent as they stay longer in the platform? For example, if you take users who joined two, three, or five years ago, how much more are they spending today versus in their first year? Second, can you also give us some direction on what EBITDA would have been ex the impact of UCWeb and AutoNavi, and talk a bit about the rationale for developing your own OS given the strength of Android and iOS? Thank you.
Yeah. Let me share with you some color on this average spending per buyer. As I said, that longer customers stay with us more, they're gonna spend annually on our platform. I'll give you example, like customer who stayed with us within a year time, their average spending, annual spending level, is somewhere around RMB 1,000.
For the ones who stay with us for five years' time, their spending level is somewhere around RMB 15,000 . For the ones stay as long as 10 years, their level is gonna be above RMB 30, 000 . This is the trend we see, so far as, our consumers base for their spending patterns.
Okay, Carlos, hi. This is Joe Tsai. Your question, I think is about the why we're investing to develop our OS. Operating system is a very long-term strategic project for Alibaba, especially for the China market. As you probably know that Google has, you know, a strong franchise in Android. Although a lot of phones in China are, you know, operating on the Android system, there is not a lot of Google services that operate with these phones. The whole thinking behind developing an operating system is that it's not just an operating system. It makes sense if you have overlay a number of Internet services on top of that operating system, for example, maps.
For example, for us, in our case, e-commerce. We feel that we are a very strong Internet service company in China, and developing an OS for the mobile device, not just phones, but also other mobile devices, will be a long-term winning strategy for us. I just wanna emphasize that it's a very long-term game. The dominant player today may not be dominant tomorrow. That's why we're continue to investing in our OS.
Thank you. Our next question comes from Piyush Mubayi from Goldman Sachs. Your line's open. Please go ahead.
Thank you for taking my question. Can I just ask you the question about I think Carlos asked this question earlier. Would it be possible to break down the higher expenses for the quarter between the impact of consolidation and the higher spending on the core business? That's the first question. Second, you've got a strategic position in ASEAN with the investment in Singapore. Could you give us a sense of how you'd like to see this evolve? Thank you.
Yeah, Piyush, for the investment we make, you see ultimately if we exclude the impact of that to company from the non-GAAP EBITDA, our non-GAAP EBITDA margin would have been somewhere around 54%.
For the global strategy, we believe that Southeast Asia is a very important area we have to explore. In this area, a lot of Chinese people living there, and they are familiar with Taobao, and they like to buy from Taobao. Today, what we are doing is that we trying to develop or to collaborate with our partners to make the logistics system and the network system are ready. For example, early this year, we made investment in Singapore Post, and the reason is very obvious, and we want to work with them to build up the logistic network in the Southeast Asia to help our merchants to deliver products to this region more efficiently.
Thank you. Our next question comes from Thomas Chong from Citigroup. Your line's open. Please go ahead.
Hi. Hi, Joe, Jonathan, and Maggie. Thanks for taking my questions. My question is about Juhuasuan. Given recently there are a lot of news flow talking about the revamp of Juhuasuan, can you comment about the long-term strategy for this business line? Would you doing your own merchandising to grab the share for the discount retail sector in China? Thanks.
Okay. This is Daniel. I will answer this question. For Juhuasuan is a very unique platform. This platform is the purpose to first to serve our Taobao seller, to help them to sell in a model sort of group buying the product to the Taobao consumers. We limited SKUs, but a very deep stock level that the merchant can sell overnight, without any distribution cost. The sales could be very efficient. The other purpose for the Juhuasuan is to not only to help our merchant to sell products, but also to help them to promote their storefront.
In this case, merchant will view Juhuasuan as a marketing platform, and they will use some product to be promoted in this Juhuasuan platform to make people aware of their storefront and go into their storefront for repeat purchase.
Thank you. Our next question comes from Alicia Yap from Barclays. Your line's open. Please go ahead.
Hi, good evening, everyone. Thanks for taking my questions, and congrat on a strong quarter. My questions is regarding the AliExpress. Wanted to know what are the categories that are most attracted to the global consumer on this marketplace, and how should we think about this marketplace with the upcoming November 11 promotion? Thank you.
Yeah. It, AliExpress is a platform to help Chinese merchants to sell to the consumers in other countries. When you look at the top-selling categories in AliExpress, actually it's in different countries, the top-selling category could be very different. Today, for example, in Russia, and apparel is obviously the number one category because everybody understands in Russia and the consumer market is not so mature, and people cannot find good apparel, good jacket with good with high quality but low price. China is famous for the manufacturing base of apparel. For other countries, actually for some countries, consumer electronics and the digital product and phone are very popular.
For this coming Eleven Eleven, AliExpress will also join this campaign, and they will promote the products and as well as the brand and the merchants on our platform and to the people in other countries.
Thank you. Our next question comes from Eddie Leung from Merrill Lynch. Your line's open. Please go ahead.
Hi, good evening. Thank you for taking my questions. I have two questions. The first one is about your active buyers. Could you share with us some metrics about the retention rate you have seen of your active buyers in the past, let's say, year, as well as the organic user growth you have seen on your platform? Secondly, about your merchant base, could you give us the number of merchants on your Taobao and Tmall platforms in the past quarter? Thank you.
Yeah. For the first question, the active buyer retention, as Maggie mentioned just now, our platform have a very good stickiness to the consumers. People usually start with some light category. When we call it light category, for example, like virtual items, people for the new customers, they will start with some virtual items like prepaid card, cell phone card, game card. When they get used to online shopping, they will switch, they will buy items from other categories, they will spend more and more money on our platform. When you look at our active buyer, every quarter in the past few quarters, you can see the net add is very material.
We are confident that these people will spending more in the future as they get used to shopping online.
Thank you. Our next question comes from Erica Poon Werkun from UBS. Your line's open. Please go ahead.
Congratulations on your results. My first question is about mobile GMV. We've seen continued fast growth in the mobile GMV contribution. How do you see that contribution to trend over the next couple of years, and how do you expect that to influence your, the company's average take rates and also gross margin? The second question is on Double Eleven. Just wondering, you know, if you expect it to be a bigger event this year versus last year. Could you share with us how many sellers are participating this year versus last year and if there's any early indication on consumer responses? Thank you.
Right. In terms of the mobile GMV as a percentage of total GMV, we're already 35.8%. We see it still going up. We believe that in the following quarters, you'll see the increasing trend. However, we do see PC has its role, right, in this e-commerce. People will not switch 100% to mobile. Having said that, to us, mobile is just another piece of screen. What we are focusing on is, are the people behind the screen. To us, separating the mobile GMV and PC GMV is really for purpose of, you know, in this early stage for mobile progress, investors and others really concerned and would like to know our progress on mobile front.
Going forward, you know, to us, it's really integrated part, and it's one marketplace. The users are ones we provide service to and focus on.
Take rate.
The take rate, right, the monetization, you have seen that our mobile take rate grow really fast. We're asked a lot of times that where the mobile take rate could be. Our expectation is that mobile take rate could be approaching PCs. The reasons are, take rate reflects the value we provided to the merchants. We do believe that we have a higher chance to provide higher value to our customers. What I mean by saying that is, first of all, we see more customers we can provide service to for this mobile platform. It's more buyers, more merchants. Secondly is higher engagement.
We do see people come more and more often, many times than PC. Third one is, we could utilize more on the data side to drive and to provide more value to our customers. In summary, we do see the mobile take rate could, keep grow and approach PC.
I just wanted to sort of talk a little bit about just taking a step back to talk about mobile monetization. You know, as you can see, we're, you know, we're disclosing mobile revenue as a percentage of our total China retail marketplace revenues. We're, we're one of the very few companies in China that has really generated substantial revenues from mobile and clearly disclose it. The reason why mobile monetization rates continue to increase is that, you know, when we look at a user, they're a consumer. When they come to use our mobile app, their commercial intent is extremely strong. In fact, that commercial intent is no different from when they visit a desktop computer. When they come to the Taobao app, they wanna buy something.
That leads to very strong conversion rates, which then benefits the merchants, which then allows the merchant to, the confidence to, allocate more of their marketing budgets on us. Our mobile users actually generate transactions. As I have said, over the last 12 months, $95 billion of GMV, generated on our mobile, platform. We see that this strong commercial intent, applies across the board, whether it's on desktop or mobile.
This is Daniel. I will take the second question, Eleven Eleven. There will be one week ahead. For this year's Eleven Eleven, this will be our sixth Eleven Eleven promotion. Last year's promotion was very successful. The sales volume was RMB 5.8 billion, which is very huge. This year we don't want to focus on a single number. Instead, we want to achieve some other objectives. First is that globalization. We want this year to be the starting point of our global Singles' Day promotions. We have really trying to bring more and more overseas high-quality products via our platform to Chinese people.
I'm sure many of you have heard the story of Costco and they have very successful in our pre-sale campaign which is just accomplished. The other thing we focus on is mobile. As you can see more and more Chinese consumers they shopping via mobile device. We want to our Eleven Eleven promotion could be more fit to Chinese consumers' experience and to give their a good experience and look and feel and the shopping selection on the mobile side. The last one is how to introduce how to attract more and more participants in our ecosystem to this big campaign.
This year, for example, we invited hundreds of game developers to develop small games and tens of thousands of merchants, they use these small games in the storefront to interact with consumers. We also have a lot of movie stars. They are interacting with their fans, and they help us to distribute the coupon to these fans. Generally speaking, November 11 is not a game for Alibaba company. It's a game, it's a big day for the ecosystem. Today in China and tomorrow, we think it's a global day for the consumers and merchants and ecosystem in e-commerce.
Thank you. Our next question comes from Ming Zhao from 86Research . The line's open. Please go ahead.
Yes. Thank you. I have two questions. First question is, we don't see the guidance. Is this company's policy of not giving guidance for the future quarter or future year, or can you share some color about December quarter in terms of GMV or revenue? That's my first question. The second question is about the accounting of the Smart Logistics. Maggie , you just mentioned that the profit sharing percentage change has led to a slightly decline in the, you know, below the line other income. Does that mean there isn't really not any significant number there for the Smart Logistics? Or, you know, in the future, if that co-company is aggressively investing, we're gonna see some loss there. Thank you.
To me, it's Maggie. Yes, it's our company policy not giving out guidance. The reason is because we're really a long-term view, rather than, you know, focusing on the near-term, you know, profitability or revenue, et cetera. We will be continuing to communicate with investor analysts closely on our business progress and reports on performance, but not giving guidance. In terms of profit sharing, I guess you're talking about the profit sharing with the Small Micro Financial Group. Just for the logistics, the Cainiao group, we're not having a profit sharing arrangement, neither we consolidate them, because that's the company we own 48%, so not have a control in that.
Our profit sharing with the Small Micro Finance Group, what I'm trying to say is that that group's business, you know, has tremendous potential, but it's still in a very early stage. They are not really after a high profitability, you know, high growth in the profit. We do not expect, you know, a significant profit sharing from that group in the many near term. For the Smart Logistics, we have actually accounting for that part of the investment. The total investment commitment for that company is 48% of RMB 5 billion. That give you a sense about, you know, the impact.
Thank you. Our next question comes from Scott Devitt from Stifel. Your line is open. Please go ahead.
Hi. A separate question on Cainiao Smart Logistics. Could you just provide an update on the progress of it? Generally any improvements or changes in merchant delivery times or other fulfillment measures that you track in the quarter? Secondly, could you talk a bit more about international efforts, and the way you're thinking about growth outside of China? Thus far, Alibaba has benefited internationally, partially through organic growth and also made some minority investments. I'm wondering how you would depict future growth in international markets, organic versus acquired. Thank you.
Yeah. For the first question, Cainiao Smart Logistics , point number one, we are still working closely with our logistics partners to connect our system with their system so that we can track the data, track the status of the order, for every single order generated on our platform. Today, we are order system of, from our 14 major delivery company partners. Actually, we have already connected the system with them. Today, we are working heavily with them to prepare for the coming November 11. Hopefully, we can track every single order from November 11th, from our system integration. Point number two, for the hardware infrastructure, today we are still looking at the infrastructure resources, the land use right in the critical areas.
We have already made some investment to acquire some land use right. But we will, when we launch these warehouses and we construct, and we will basically share these resources with our logistics partners to help them to expand their capacities. For the second question, for the international expansion, and today, we view the global strategy is one of the important strategy in our group, but we will start with the cross-border right now. As we said, today, when we look at the cross-border, we try to leverage what we have today. Basically, first, basically, there are two things. First is our, we have the huge consumer base in China, and China is the largest consumer market in the world.
What we are doing right now is to help more and more overseas merchants, most of them, they don't have China presence right now, to help them sell their products and services via our online marketplace to Chinese consumers. The second strength we have is that China is the largest merchant as a manufacturing base. Today, via our AliExpress platform, we help Chinese merchants to sell through to the consumers in other countries.
Sir, we just have time for one more question.
Thank you. Our next question comes from Mark Mahaney from RBC Capital Markets. Your line is open. Please go ahead.
Thank you, and good evening. I'd just like to follow up on an earlier question about Alipay. Any more details you can provide on how that investment is faring for you, and overall, the increased penetration of Alipay across the Alibaba platform and off of Alibaba? Thank you.
Yeah, Mark. First of all, Alipay is within Ant. Now we changed name to Ant Small Micro [audio distortion] Group. It's a totally separate group business. Having said that, the growth of Alipay business is very well. It's still a private company. We're not, you know, they're not providing public disclosure, so I'll say. What I can share is that the business grow very well. TPV's total payment volume grows very well. Their mobile business, the Ali Wallet, it's, you know, very healthy, you know, growth trend. The impact to our AGH group are really two lines.
One line is the processing fee we paid to Alipay. That still stays at the same charge level, which is very favorable to Alibaba Group. The other line is the profit sharing I discussed. Yeah, that's about Alipay.
With that, operator, I think we need to close the call.
Thank you. Ladies and gentlemen, thank you for participating in today's conference. This concludes our program. You may all disconnect and have a wonderful day.