Alibaba to invest more than 30 trillion won in cloud business

Alibaba, a Chinese e-commerce company, announced that it will invest more than 200 billion yuan and more than 30 trillion KRW in cloud computing over the next three years. Alibaba already occupies the No. 1 market share in the cloud computing market in China, but it can be viewed with the aim of expanding its market share in the global market, where Amazon and Microsoft are ranked at the top.

Alibaba has established Alibaba Cloud, a division of Alibaba Cloud Computing, to handle massive amounts of online shopping mall transactions. Although it has been actively investing so far, the additional investment of 200 billion yuan announced this time is a large sum equivalent to half of sales in 2019. According to Alibaba, this additional investment will be made in network improvement and new data center construction in 21 regions around the world in addition to operating systems and server chips.

This additional investment also contributes to the impact of Corona 19. Alibaba has pointed out the possibility that the global economy will be hit hard by Corona 19 in mid-February. According to reports, sales of major brands such as Estee Lauder and Uniqlo sold on the Alibaba e-commerce site in January-February decreased 40-80% from the same period last year.

Meanwhile, Alibaba Cloud is growing rapidly. In the fourth quarter of last year, Alibaba cloud revenue exceeded 10.7 billion yuan, an increase of 62% over the same period last year. Jeff Jang, president of Alibaba’s cloud intelligence division, said that the Corona 19 epidemic stressed the market economy as a whole and urged more focus on the digital economy, and that additional investments are expected to boost Alibaba earnings recovery.

The cloud computing sector accounts for 7% of Alibaba’s total revenue. The Alibaba Group emphasized that cloud computing will become Alibaba’s main business in the future. It is also evaluated that Alibaba is to compete with companies that have a large share in the global cloud computing market, such as Microsoft, which provides Azure, and Amazon, which introduces AWS. Related information can be found here .