In recent years, Alibaba has actively reshaped its business philosophy, prioritizing users and harnessing the power of artificial intelligence (AI) to enhance its market positionThe company firmly believes that creating value for users, improving user experience, and addressing user pain points are fundamental to its growth strategyThis shift is not merely a response to competitive pressures but a proactive measure to leverage Alibaba's vast data resources, extensive user base, and a diverse array of merchants and productsInvestors are now more than ever looking to recognize the long-term investment potential of a revitalized Alibaba.

September 2024 marks a significant milestone for Alibaba Group, as it celebrates its 25th anniversary and sees its inclusion in Hong Kong's Stock Connect program, allowing mainland Chinese investors easier access to the stockThis integration comes following Alibaba's announcement on August 28 that it successfully completed its dual primary listing in Hong Kong, officially becoming a company listed on both the Hong Kong Stock Exchange and the New York Stock ExchangeThe influx of capital into the Hong Kong stock market is primarily driven by the Stock Connect program, with predictions suggesting that Alibaba could experience substantial investment growth akin to its competitors like Tencent and Meituan.

In parallel, on August 30, the State Administration for Market Regulation announced that Alibaba had successfully completed a three-year reform process, yielding positive resultsThis news, coupled with further developments, has created a wave of renewed interest amongst both users and investorsOn September 4, it was announced that the Taobao app would fully support WeChat Pay, facilitating interconnectivity between Alibaba's and Tencent's platformsThis signifies an unprecedented collaboration between two of China's most potent platform companies, ultimately aimed at enhancing the user experience.

As a former Alibaba employee, I have been observing the trajectory of the company from the vantage point of an investor

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The recent events signal a stabilizing force within Alibaba; the company is now attempting to identify its future direction and investment valueA critical insight emerged during my analysis of Alibaba’s evolution within three significant phases.

During the initial phase, under the leadership of Jack Ma, Alibaba emerged from a modest B2B e-commerce platform to a colossal internet company encompassing various sectors, including e-commerce, finance, and cloud computingFrom its establishment in 1999 until Ma’s retirement in 2019, Alibaba thrived amidst the rapid expansion of China's internet, mobile internet, and e-commerce landscapesCompeting companies, like eBay's eBay.cn aimed to challenge Alibaba, but they fell short, unable to provide a formidable competitionAlibaba's triumph stemmed from its profound understanding of Chinese consumers, leveraging its platform advantages, extensive range of products, efficient payment and logistics systems, and continuous service innovations to earn consumer trust.

In the second phase, leadership transitioned to Lu Zhaoxi and Zhang Yong as Alibaba sought to manage its growing operations and tackle new global challengesAlthough the strategies focused on globalization and rural outreach garnered initial successes, they were not as effective as the company's earlier efforts to dominate the domestic e-commerce marketFor instance, Alibaba's attempt to penetrate Southeast Asia through its investment in Lazada faced heightened competition from regional rivals like Shopee and the influence of dynamics within each local market, such as regulations and economic conditions.

Additionally, initiatives to promote rural e-commerce, driven by the desire to enhance living standards in countryside areas, faced setbacks despite strong governmental supportCompetitors like Pinduoduo emerged with more accessible pricing, thereby winning over farmers

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Likewise, Alibaba Cloud, which initially enjoyed significant advantages within China's burgeoning cloud computing industry, began losing ground as new competitors gained tractionThis barrage of challenges forced Alibaba to reassess its strategies, even as it was urged to undergo substantial reforms.

The past few years were marked by slow revenue growthRealizing that without growth, various issues would proliferate, Alibaba undertook structural adjustments that did not yield satisfactory resultsThis set the stage for a critical transformative phase led by CEOs Daniel Zhang and Joe Tsai, who embraced a user-centric approach underpinned by AI-driven methodologies.

The introduction of “user-first, AI-driven” strategies reflects a necessary pivot towards a more sustainable and adaptable business modelHistorically, Alibaba was viewed as a company driven by operational sales, whereas its competitors like Baidu and Tencent thrived on technology and product focusRecognizing the shift in consumer expectations is imperative for Alibaba, especially as it finds itself in a market where customer-centric practices prevailThe previous approach of strictly adhering to KPI-driven methodologies failed to account for evolving user requirements, leading to discontent among consumers.

Alibaba now aims to emulate Tencent’s model by prioritizing user experience and value, thereby addressing user pain pointsBy focusing on the numerous aspects that could enhance the user experience, such as product variety, merchant engagement, and innovative advertising solutions, the company seeks to regain tractionThe implementation of AI technologies plays a pivotal role in optimizing Alibaba's operational efficiencies and elevating the overall marketplace quality.

Positive indicators have emerged in the first half of 2024, showing signs of recovery as Alibaba’s GMV market share stabilizes, thanks in part to its comprehensive shift towards AI

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