5 Huge Secular Trends Powering Alibaba’s Growth

Alibaba Group Holding Ltd (NYSE: BABA) (SEHK: 9988) plans to create value to shareholders for the next ten years by riding these trends – Better Buy stocks

There are many reasons to be bullish on Alibaba Group Holding Ltd (NYSE: BABA) (SEHK: 9988).

The technology conglomerate is both super profitable and growing quite rapidly; Alibaba is also both gigantic and a well-run company.

Alibaba finds itself in its current position, not by luck. Management has smartly positioned the company to benefit from many current and future potential growth trends.

With this in mind, here are five huge secular trends that Alibaba is currently riding and which could benefit shareholders in future.


In the past 20 years, Alibaba has ridden the increasing development of Chinese e-commerce to a huge market cap.

As a result of the increasing development of e-commerce in China, Alibaba’s profits and sales have increased substantially.

In the next two decades, Alibaba could continue to benefit from the e-commerce trend with faster delivery speeds and more internationalisation of its strategy.

Faster delivery speeds could increase demand and more international users could increase Alibaba’s overall target market.

Autonomous driving

Autonomous driving will be a trillion-dollar market, and Alibaba will be there to benefit through its AMAP super mobility app, which can be used for ride hailing.

There’s also the potential of Alibaba Cloud, which can be used to store a lot of the data generated from self-driving vehicles. The company also has its own internal self-driving efforts.

Besides ride-hailing and cloud services, Alibaba can also benefit from autonomous driving in other ways.

If done correctly, autonomous vehicles can speed up delivery times (say for potentially heavy items that can’t be delivered via drones) and improve logistics efficiency. Demand generally increases if delivery times are shorter and more cost effective.

Cloud computing

Continued growth in China’s cloud is a huge trend due to the cloud’s flexibility and potential cost-effectiveness.

With computing resources on demand, companies can spend more time building/improving their own products/services rather than spending valuable time managing datacenters. Given the scale in the cloud, many companies could potentially save money too.

As the leader in China’s cloud infrastructure services market, Alibaba’s cloud division will likely have a lot of growth left.

This year, Alibaba announced plans to invest US$28 billion (RMB 200 billion) in its cloud business over the next three years to help the business continue to grow and gain scale.

Online-to-offline local services

Although Meituan Dianping (SEHK: 3690) arguably gets more attention for its online-to-offline (O2O) local services business, Alibaba also has a leading O2O local services business in

As the market continues to expand and as technology develops to increase efficiency of delivery, Alibaba’s local services business could become more profitable (and valuable too).


Not to be left out, Alibaba also benefits from the fintech trend via its one-third ownership of Ant Financial.

According to recent reports, Ant could reportedly debut at a valuation of over US$200 billion. If the IPO goes well, Ant could be worth even more.

Foolish conclusion

Alibaba is a great company that benefits from huge trends such as the continued development of e-commerce, autonomous driving, the cloud, online-to-offline local services, and fintech in China.

Due to those trends, Alibaba is still a great investment despite its outperformance in 2020.

More reading

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Jay Yao doesn’t own shares in any companies mentioned.

The Motley Fool Hong Kong Limited( 2020

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex Securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Act Fast - Promotion Ends In
Click Here To Get Started
Act Fast - Promotion Ends In
Click Here For More Info