Okay. Good afternoon. We have had a long day. I know, there is so much information, you're probably information overload. Although we have been prepared this for a while, when I sit down there and watch every single leaders presenting, I just feel so proud of being part of this team. Last earnings call, I talked about that starting from fiscal 2017, we're gonna give further degree of clarity and disclosure to the capital market. I mentioned a couple things. I mentioned about the revenue guidance and also give further disclosure on the financial performance for different business and more disclosure on the investee businesses such as Cainiao. We said that we're gonna talk more and give additional information on Investor Day.
Here we are. This is all I'm gonna talk about. Okay. I'll cover five topics today. Number one, revenue guidance. I'm gonna give the guidance. Number two, segment reporting. How we're gonna re-report, how we divide a segment, and what kind of metrics we're gonna put in the segment reporting. Broader value proposition versus GMV. I got a lot of question these days on this GMV disclosure. More disclosure on the progress of the business initiatives. Number five, how to value our company. That's a big topic. Revenue guidance. You can tell from today's discussion that our business is getting more and more comprehensive. We, together with our affiliates, pretty much have all the building blocks for commerce in Cainiao.
It's not only about marketplace, it's also about cloud computing, also about the logistics, payments, financial services, you know, local services, digital entertainment, and search, and all of that embedded. Lazada and Youku are the two businesses newly joined the family. We just finished a transaction this quarter. When you look at this business, we are more confident than ever that our value proposition is moving to the next level. For some of the players that are still addicted to one single metric, we have so much to show you. For revenue, next year, we expect the revenue growth going to be over 48% year-over-year. I see the consensus number is 39%-40%.
Some people may have difficult to add in the Youku, Lazada. Youku is easier, right? It used to be a list-listing company, and there are consensus out there that you can find. Lazada, I can share with you the number because their number have also been disclosed in their parent company's financial reports, right? Their top line last year was around $275 million, and they incurred a loss at around $300 million. If I take that two new business out, our revenue growth would still be 36% year-over-year. Compared to the 33% year-on-year growth we had for last year's revenue, it clearly shows a revenue acceleration for the coming year.
Having said that, I want to caution that the revenue growth contribution coming from Youku and Lazada will reduce the margin of our core business because these two business are still in the developing stage, which I think people understand. Okay. Segment. We're gonna report in a four major segments. This is from the left to the right. We have our marketplace. This is the core business, have been there for years. We, you know, adding new elements. And we're gonna have Cloud Computing and mobile media and entertainment. This is a new segment we separate out and just gonna disclose separately. And there are other initiatives, including YunOS, including AutoNavi, some new, you know, innovative initiatives.
For each of these businesses, we're going to report to you that revenue, operating income losses, depreciation, amortization, share-based compensation expense, non-GAAP EBITDA. Basically give, you know, open up the book. By providing the segment reports, I think it gives you more clarity. You can see more clearly about the margin level for our Core Business. Our Core Business margin have been very healthy. You've read our earnings, it stayed at around 60%. In the past, I have, you know, that mentioned that during my speech in the earnings. We're going to also have a small unallocated corporate overhead. Okay. Broader value proposition versus GMV. Based on today's discussion, all we're talking about is how we having helped merchants to improve their business efficiency and move their efficiency level to the next stage.
I still remember in that 2014, when we prepared the prospectus for our IPO, we had this one sentence written in the prospectus, said that we are helping to transform the businesses being conducted in China, and now this is happening. I think you have already get the message and there are tons of information, we, you know, bring to you. In the old model, people kind of built their model by use the GMV and take rate. If you still gonna look at the take rate and GMV, I got a question on Maggie, will the take rate go up? If our value propositions in the much broader, the take rate would definitely go up, right? There is no question.
The thing is that you missed to capture the other values we're providing, and then when you look at the revenue we get, it's no longer simply coming from this distribution, you know, kind of a revenue. We're also are adding marketing revenue. You know, the productivity level, we try to bring the to the merchants to the next level. This part about the efficiency of the merchants' operation, we haven't really, you know, substantially monetized yet. I want to talk about our value proposition from another angle. This is a merchant's angle. When you look at one merchant's P&L, this is their typical P&L. Revenue, cost of revenue, distribution costs, sales, marketing expense, R&D, you know, financial costs. We are helping them on every single line of these items.
We lease out our businesses that bringing value to each of the lines and also what value we bring to them. For example, revenue, right? This huge marketplace is bringing 423 million annual active buyer to the merchants and brands and help them to reach sales, to increase revenue. When you look at the cost of revenue, this morning, Sophie talked about our 1688.com. This is a wholesale platform that enable the top of merchants one click away from sourcing in a more efficient way. These, you know, merchants incur logistic costs. Our Cainiao is helping to improve the logistic efficiency so that their costs get reduced. Distribution costs, you know, that's our core help to sell, uncertain, Alibaba part.
The marketing. More and more brands and merchants come to us because they realize that we're, besides helping them to achieve transaction, we're also help them to acquire consumers, help them on the consumer retention, and this is such an ongoing and real-time process. You know, at R&D, we have the cloud business helping and SME always had a difficult time to get loan. Our, you know, Ant Financial is helping them. I studied a research talking about the retail company's margin in China. It is very low. Actually, it's a low single digit nowadays. We believe that by providing all of this value to the merchants, we're gonna help to improve these companies' margin, and then we'll get our fair share.
When people talk about take rate, are you going to increase, you know, take rate increase from 2.5%- 3.5%? We're talking about, you know, the potential as big as this. Okay. I hear you just say, just tell us whether you're going to drop GMV. Right? Are you going to stop reporting GMV? The answer is no, of course, we're going to continue to report GMV. GMV is still a very important metrics because, you know, you hear our chairman's talking about our longer term goal, the fifth largest economy. Our CEO talk about the CNY 6 trillion 2020 fiscal. This shows our revenue projected by or shows the value proposition. We're going to change to a annual disclosure from a quarterly disclosure. Why is that?
Number one, I think you've all understand that, you know, all these broader value proposition we talked about. While other companies really see this GMV as the single important key metric, we actually shows the real value. You raise from the revenue, you see our margin by segment. You see all of these reporting metrics talk about our business progress. We internally are not really seeing this GMV as the top, you know, as the KPI. For example, Taobao, they already removed the GMV from their KPI list. We don't manage this business by managing the monthly, quarterly GMV. It doesn't make sense for us to report to the market on a, you know, quarterly basis. However, we're gonna still update you on the GMV on the annual basis because we still remain our longer-term, midterm goal unchanged.
I could understand your question and concerns. I guess the number one concern you have is that how can I build a model, right, without a GMV? Do you really think you have, you know, the GMV is the real driver for your model building? The old model is like a GMV times take rate. I know this is a complex business and not easy to build, not easy to value. When you use that model, if take rate off by 0.1%, your revenue off by CNY 3 billion, right? That's, you know, that's why we provide the revenue guidance to kind of off that load and give you more clarity, make things easier.
The second question you may have is that, is Alibaba covering up any problems with the business by stop reporting GMV, right? You know, if that's the case, why are we still talking about the RMB 6 trillion, right? I could share with you actually, today is June 14th. The quarter has like a 16- day to go. Our Q to date GMV growth is very healthy. It's above 22% year-on-year growth. We're gonna report June quarter GMV in our June quarter release. The next time we're gonna talk about GMV would be in our March quarter. We're gonna have more disclosure on progress with business initiatives. You have seen this in our 20-F and our earnings.
We provide a breakdown of shareable results for these equity invested companies. We also bring up the full disclosure for China, since so many people talk about China. We got this, you know, SEC investigation, et cetera. I think whether we should consolidate China is not determined by Jack, Joey. It's determined by the U.S. GAAP, right? It's the ASC 810, and read all of these literature. I think we will be very, you know, cooperative, we provide all of this information, we want to be as transparent as we can be. If anybody want to consolidate China, you just go ahead, do it and see the impact. Because I can't do it. I have to comply with the GAAP.
Starting from this new fiscal year, we're gonna start to report to you number of direct paying customers for our AliCloud business. This will be a new metrics you're gonna see because this business is getting more and more, you know, interesting to the investors and shows strong growth and potential. I'll have that report in place on a quarterly basis. Okay. How to value our company? I think everybody has their answer. From my point of view as the CFO of the company, I think this is a complex business to value, and it's not easy when you look at all of these parts, right? The only way to me is that these business are in different development stage and different cost structure, right? Different valuation method probably should apply.
Some of these have profitability, some of these in the early stage. We would recommend you to look at the sum-of-the-parts. When you look at this marketplace business, right? We're gonna show you all of these, strong growth, high margin, value proposition moves to the next level. Cloud is growing at a fascinating speed. Within the mobile and media entertainment sector, we have two major businesses. One is UCWeb, the other is Youku. You probably should start look into detail of these. For example, UCWeb, by the time we invested, it was like $2.3 billion business. I think the last round of investment is higher than that. By that time, there was no Shenma.
In the past two years, we have developed this Shenma. Shenma already turned into the second-largest mobile search company in China. You have a comparison, right? Baidu is there. Then, so Youku. This is a problem because we have been giving multiples on the results of the entire business, which that some of the business still in the last position, we have been punished by giving like 20 times of that losses and offset with our valuation. That's not the right way. If you look at Youku as example, Youku is still in a loss-making stage, but it is, you know, CNY 5 billion, around CNY 5 billion business by the time we invest. Then, other, you know, others, we have AutoNavi, the map business.
Ant Financial, you have that, They recently financed at $60 billion, and we have a 37.5% profit-sharing arrangement with them. Eventually, if the regulation allows, we're gonna convert that to 33% of equity holding. Koubei each one of those. We also have other strategic investments. You can read from our balance sheet that we have invested over $50 billion. This investment including Youku, Weibo, Intime Retail, you know, Shiji and all of that, we've our leaders have talked about, you know, the integration and value creation kind of work we've done with these invested companies. If you take out all of these others, leave the marketplace business alone, you could work out the multiples, which is very low.
That concludes my financial discussion. We, I'll probably, yeah, turn to Joseph Tsai for his discussion on M&A. Thank you.
Okay. I'm the last session, and then we go into Q&A after this. I think I've been given 15 minutes, so I'll try to make it quick. I'm being asked to talk about strategic investments and strategic M&A. This is really a question about allocation of capital. Okay. If you think about a company or any company, any public company, there's a number of ways to utilize your capital. For a company like us, we generated $8 billion of free cash flow in the fiscal last fiscal year. We have a lot of cash, and we also raised cash in the IPO. What do we do? Well, there are several ways of doing it. You can invest in new businesses. Okay.
You can, what I'm talking about is excess cash. That's in addition to, you know, what you already invest in your own business in terms of CapEx. What you could do is you can make acquisitions, you can make new investments in other businesses. That's number one. Number two is, you can buy back your own stock. Right? You can buy back your own stock. Number three is you can give the money back to your shareholders in the form of a dividend. Okay? Number four, you could let the cash accumulate on your balance sheet. What we choose to do are the first two things, beyond our own CapEx, our own business like Cloud and things like that. Beyond that, what we choose to do is to invest or acquire new businesses.
Second, we also choose to buy back our stock. If you think about it, a share repurchase is a reinvestment in your existing assets, and it's anti-dilutive, it's an accretive transaction. That's what we have decided to do from a capital allocation standpoint, invest in new businesses and buy back our own stock. We, of course, at this stage, we don't plan on give money back to our shareholders in the form of dividends. I think you would all be very disappointed if we decided to do that. The market is too big. The opportunity set and the potential is too big for us to think about paying dividends. All right.
That's kind of a, you know, a quick summary of what we've decided to do. Here, I want to talk about our philosophy in terms of allocating capital. All right? I would say when we do M&A or new investments, it's never done for financial reasons, in the sense that we never calculate what's the accretion to EPS. Is this gonna be accretive to our earnings or not? It's always done with strategic thinking in mind. Strategic thinking meaning that, is the acquired business going to add value in the long run to Alibaba? Not in the next quarter, not in the next three quarters, in the long run. Three years, five years, maybe 10 years. That's the mindset we approach the new investments.
I wanna make sure, you know, you understand that's our philosophy. How we look at capital allocation? I've said we focus on synergies, what the acquired asset brings to Alibaba in terms of value creation, as opposed to the standalone value of the acquired asset. Okay? That's very important. You could say, oh, you know, a normal sort of investor types will say, "Oh, we bought this company. Last year it was worth $1. This year it's worth $ 2." I don't care about the standalone value. I care what value it brings to Alibaba. Okay? Number two, when we make an acquisition, the outcomes are likely binary outcomes.
In other words, we could actually lay a big goose egg after the acquisition if we don't integrate the asset well into our business. With that in mind, with that kind of risk profile in mind, you know, we're very, very careful in thinking through how we're going to utilize the asset, how we're going to integrate the asset, and how much value the asset will bring to us. Success or failure of M&A is really not about how much capital you spend. It's really about post-acquisition, the people involved and the innovation that you bring to the table when it comes to integration and when it comes to working with the acquired company.
The aspect that drives value creation is innovation and transformation. We're in a business where we are transforming the way companies do their business every day. Transformative change is not measured in percentage terms. Transformative change, when you create value from transformative change, it's valued in multiples. We ask ourselves not whether it's gonna generate a 16% return on invested capital. We ask ourselves, "Is this thing going to be a 10 x or a 100 x kind of return?" That's the question. That's because the industry we're in. If I'm in the utilities business, I would tell you totally differently. I would do a DCF. I would do a ROIC calculation. We're talking about making acquisitions to transform your business, to transform the industry. Okay.
I want to review the, just to review the last couple years of sort of where we've spent capital. If you look at the last two years, our most top, most significant acquisitions and investments, our top 10, make up about two-thirds of the capital we employ. You know, you read in the newspaper, Alibaba has done this and that, and, you know, every week there seems to be something new that we're buying or investing in. I f you look at the core of what we are investing in, they're really just 2/3 of that is in the top 10 deals over the last two years.
What I wanted to say here is the companies that we acquire or we have invested in have provided very strong strategic moat, you know, around our core business. Our core business being the core commerce business, we have acquired businesses in mobile media, in entertainment, in local services, et cetera, and also logistics to create this strategic moat. That's kind of the mindset that we approach these acquisition opportunities. To bring this into more sort of granular terms, look at this table. This is roughly, you know, where we put our capital in the last year or so.
We've acquired Youku and catapulted us into a leading position in entertainment, and it has very nicely fit into our whole entertainment strategy as a major both content and distribution asset. You have heard from Weidong about the Youku business. We made a very significant investment in Suning so that we have become much more competitive in the electronics category because we want to work with Suning to explore the omni-channel opportunities. I'll give you some examples of an omni-channel opportunity later when we talk about the specific case studies. We also continue to invest in Cainiao. As you heard from Judy, Cainiao just raised a round of financing of RMB 10 billion. That's about $1.5 billion.
We are 48%, sorry, 47% of that. We invested, you know, pro rata, into that, the Cainiao company because we believe in building out that ecosystem of logistics partners and strengthening the information network and the data network that Cainiao is. Today, I would say after listening to Judy's presentation, I'm, you know, I feel pretty good to say that what the capital that we put into Cainiao is very, very well spent because it is the only way to scale up to handle 145 million packages in the next three or four years. 145 million packages per day. That's the projection that Judy just gave you. We also put capital into local service businesses.
We invested together a JV with Ant Financial in Koubei, and we also invested, you know, took a stake in Ele.me, which is the food delivery business. The difference between Koubei and Ele.me is that Koubei focuses on the customers when the customers go to the restaurant. They obtain information online, mostly through a mobile device, and then they may get coupons, discount coupons and whatever, and they go to the restaurant, and they pay with Alipay, all in a closed loop transaction. Note that the Koubei business does not require last mile delivery. The Ele.me business is a takeout, food takeout business that requires last mile delivery. That's why we separated the two.
We are, I guess, a little bit more committed to Koubei in terms of our shareholding percentage at 50%. Our shareholding percentage in Ele.me is about 20%. We've also put capital into our international strategy. As you know, we took a controlling stake in Lazada, which overnight we became the largest e-commerce player in Southeast Asia. We've also put capital together with Ant Financial into a company in India, called Paytm, which is the largest mobile wallet company in India. The entry point to the India strategy may not be directly in e-commerce. We've been thinking through a lot of the possibilities of India. It's, first it's all mobile, so that's why we wanna be in mobile wallet.
The other thing is, if you, I don't think we covered it today, but UCWeb, our mobile browser, is the number one mobile browser in India. Anyway, we've done a few things to kind of position ourselves strategically in leading positions in entertainment, in logistics, in local services, and international expansion. I think that's money well worth, really well worth spent. In addition, we love our own business. We love the core business. We love our existing assets. We decided over the last 12 months, in several transactions to utilize $5.1 billion of our own capital to buy back our own stock. Very confident of our own business. That's how we've allocated capital.
When you add everything up, I think that number in the bottom is the total, $18.7 billion. Lo and behold, that is about 10% of our market cap. Okay? If you asked me a year ago, "Hey, Joe, would you like to spend 10% of your market cap to get the leading position in entertainment, the leading position in logistics, the leading position in electronics, the leading position in local services, and have very strategic assets in the international strategy?" Plus, you're going to do very accretive transactions by buying back $5 billion of your own stock. I mean, it's a no-brainer. It's a absolute no-brainer for us to do that. Looking back, I think we have utilized the capital very well.
We know that this is shareholders' money, and we have done a very, very good job, in my view, of being a fiduciary of your capital. I also want to just cover our sort of strategic M&A investment principles. What process or what kind of principles do we utilize as we walk through the process? Things that we do and things that we will not do, okay? On the left-hand side is things that we will do. We will always try to make a strategic cooperation in our investee companies. That's the only rationale. It's the only reason why we wanna hold an equity stake in an investee company is if it's comes with some strategic level cooperation. Okay. That's very, very important.
The second thing is the terms on which we make investments is always highly negotiated, meaning that we spend a lot of time negotiating right of first refusal, what happens if the company faces a change of control, because that's the one way you can position yourselves strategically vis-a-vis the investee company. Because you're jointly working together to jointly create value, create value for us, create value for them. You wanna make sure that that equity relationship has something a little bit extra in it rather than just a common stock shareholding. Finally, when we make investments, we always invest it in the relationship, meaning that we invest within the management team. We invest in time and effort with people in the relationship.
You know, I'm very, very proud that you saw that Yongfu, you know, came and made a presentation about Alibaba. He's the guy who talks about money, making money, all right? He came through an acquisition, but he didn't come through just one acquisition. We actually invested in him three times. It's a three-stage acquisition. We originally owned, like, 13%, and then we owned 65% of his company, and then we acquired the whole thing to, you know, the whole company, and he joined our senior management team. It's that long-term perspective in term when we, when you invest in that, relationship with the investee company management that allows us to ultimately bring in extremely excellent talent, incredible people into our organization.
M&A is also a way for us to bring in talent. What we don't do on the right-hand side. Oftentimes, you know, I head up the M&A and investments, you know, I sit on the investment committee. I actually oversee the team directly that does deals. Oftentimes we get requests from business units that come and say, "Hey, you know, let's spend this money in this deal. Let's buy 20% of this company." What they really wanna do is they wanna spend the marketing budget in order to secure some kind of resource of this investee company, we're not gonna do that. We're not gonna invest in equity for for a BD deal or for something that they should just spend their marketing budget on.
The other thing that we don't do is to do an M&A without a people plan. You would never acquire a company without thinking through who's gonna run it, who's gonna integrate it, who's gonna be responsible. There's always has to be a person, down to a name, that person who's gonna be responsible for the acquisition. Not the deal team, it's the operating guys that are going to be responsible for creating value out of the acquisition or out of the investee company. We actually end up not doing, not making acquisitions, of assets that are great assets, not making acquisitions because we didn't have a people plan. Finally, we don't participate in auctions.
If you get a call from one of the investment banks and say, "Hey, you're one of the three bidders being chosen to bid for this asset," we say, "No, thank you. We're not gonna be involved in that." How do we measure value creation? It's very, very important. The first thing is we ask ourselves, "Is the acquired company or is the investee company going to increase our user acquisition or user engagement?" That's very, very important. The second thing is, does the company improve customer experience?
Some of the investments that we've made, for example, in Ririshun, which is a logistics company for large appliances, and also our partnership with Suning, definitely fall in that category in terms of improving the customer experience. We also ask ourselves, "Are we expanding products and services so that our 423 million active buyers that we can cross-sell against them, these expanded products and services, and thereby creating value?" These are sort of the three measurement criteria that we apply when we look at strategic M&A and investments. There are some case studies. Oh, sorry. Let me just quickly cover this thing. Some people say, "Hey, you know, Alibaba, you know, you take, like, these minority stakes and, you know, what does it mean?
You don't control it. You don't, you know, why do you do that? Well, I have to say, in the China market, there's a shortage of serial entrepreneurs. What's a serial entrepreneur? A serial entrepreneur can't be found in China. They're in Silicon Valley. They build up companies, then they sell it after three or four years, and then they say to the acquirer, "Hey, here's a company I, you know, I'm selling it to you, but I'll stay on for two years to make sure that, you know, we integrate it, build a team, and all that." After that, I leave. That's a very established market in the U.S., and most deals, a lot of the deals in the Silicon Valley are done that way. The big companies gobble up the smaller, venture-backed companies.
That's how it's done. In China, that doesn't work because the entrepreneur is either too ambitious or is not confident enough about their business that they wanna sell it to you. You know, if someone says to you that, "Hey, buy out my entire stake in the company, you know, a hundred percent," you should just run away in China because it's not, you know, it's not the asset that you want. With the good companies, you often don't get the opportunity to buy the whole thing, and you have to give the management team, who are the founders, the space, the independence for them to, you know, to run it. My example of UCWeb, exactly that way.
They wanted to have their independence, through three stages, through a lot of patience, we finally were able to buy the whole thing. The reason to hold minority stakes instead of full acquisitions are, you know, you wanna make sure that the management still stays in place, they're incentivized, and then you align their interests to their own equity as opposed to the whole mothership. The other reason is that, you know, the asset is really not part of our core operation, but they bring a lot of strategic value to the business. Only through an equity relationship do we feel comfortable that we can share the resources. There's a lot of resource sharing, for example, for us to dedicate all of our orders to one logistics partner.
That's resource sharing, resource allocation. Why would you wanna do that if you don't have a equity, effective equity stake to have some kind of influence and to prevent the company from being acquired by competitors, right? That's another reason. The third reason is sometimes we see an asset, we like it, we like to buy the whole thing, and the deal may be available, but we say, "Wait a minute. We're not sure about the integration risk." Remember, the outcome may be binary, all right? We say, "Let's take a step-by-step approach." That's just part of risk management. These are the reasons, these are the circumstances under which we don't do full-blown acquisitions. We just do minority investments. I think I'm running out of time.
I would prefer to leave it for questions with Jack, Daniel, and Maggie. I'm not going to go through the specific case studies, but all the case studies will be up on the website, so you'll have access to it. Thank you very much.