DingTalk, the workplace collaboration app developed by Alibaba Group Holding, has generated more than $200 million in core revenue in the past six months, a sign of its commercial potential.

The app generated annual recurring revenue (ARR) of more than $200 million in the six months ended Sept. 30, or the first half of Alibaba’s 2025 financial year, the Alibaba unit said on Thursday. ARR is a metric to indicate how much money is generated annually from subscriptions, which in DingTalk’s case are software subscriptions.

The milestone means that DingTalk has found a viable business model in China’s business-to-business (B2B) services market, said DingTalk President Ye Jun. “DingTalk has established a monetization path that suits China’s B2B sector,” Ye said at a corporate event in the southern city of Zhuhai on Thursday.

Have questions about the biggest topics and trends around the world? Get the answers with Knowledge of SCMPour new curated content platform with explainers, FAQs, analysis and infographics brought to you by our award-winning team.

Alibaba’s workplace tool, which enables project collaboration and document sharing, competes with similar products from TikTok owner ByteDance and Tencent Holdings for corporate users.

Ye was quoted by Chinese magazine Caijing on Thursday as saying the Alibaba unit plans to break even in 2025. He said DingTalk needs to rely on capital injections from Alibaba Group to survive in the past, which is “unhealthy” and stressed that the unit must “operate independently as a normal company”.

This is in line with the broader strategy outlined by Alibaba Group CEO Eddie Wu Yongming in August.

In a conference call with analysts that month, Wu said Alibaba expects to see most of its business units, beyond e-commerce and cloud services, “breakeven within one to two years and is gradually contributing to profitability at scale,” as the e-commerce giant continues to improve profitability across the board.

DingTalk, once a unit under Alibaba’s cloud computing unit, became a separate business last August as part of the tech giant’s biggest ever corporate restructuring, unveiled in March last year. The unit has stepped up its monetization efforts over the past year, banking on artificial intelligence (AI) and a comprehensive software ecosystem within the app to attract new business customers.

The latest milestone comes at a time when DingTalk, which had 700 million users and 25 million business customers at the end of 2023, faces increased competition from online workplace apps developed by other Chinese tech giants, including ByteDance’s Feishu and Tencent’s WeCom, the corporate company. the WeChat version.

Feishu, which has yet to reach profitability, expected its ARR to top $300 million for the full year 2024, its CEO Xie Xin said in September. WeCom did not disclose its revenue figures, but said in January that it would reach profitability earlier than DingTalk and Feishu.

More from the South China Morning Post:

For the latest news from South China Morning Post download our mobile app. Copyright 2024.