The Alibaba office building in Nanjing, Jiangsu province, China, August 28, 2024.
CFOTO | Future publishing | Getty images
Alibaba The shares dropped 7.6% Thursday after the Chinese electronic commerce giant missed the expectations of profits for its fourth tax quarter at the top and bottom.
Here’s how Alibaba did in her tax quarter finished in March against LSEG: Estimates:
- Income: 236.5 billion Chinese yuan ($ 32.6 billion), compared to 237.2 billion yuan expected
- Net income: 12.4 billion yuan, compared 24.7 billion expected.
While being below the expectations of analysts, revenues have nevertheless increased by 7% in annual shift.
Alibaba’s net profit was also still 279% higher in annual shift, on a low base. Alibaba said it saw certain losses following the elimination of some of its subsidiaries, which have been offset by an increase in income from operations and changes in equity assessments.
However, analysts hoped that business investments in artificial intelligence and its basic electronic commerce company would help it or exceed high expectations.
But Alibaba is struggling with macroeconomic volatility that affected consumers’ feeling in China. The Washington Trade War with Beijing created uncertainty in the second world economy, which saw enormous tariffs on both sides during the last quarter during which Alibaba reported.
Beijing and Washington have agreed to suspend most of the prices on goods from each other this month.
The main division of the Taobao and Tmall group of Alibaba – the company’s electronic commerce activity of the company – has seen income increase by 9% to 101.4 billion yuan. This growth rate is faster than the level observed during the previous quarter. Customer management income, which Alibaba has selling marketing and other merchant services on his platform, jumped 12% in annual shift. It is a large income engine for the company.
In recent months, China has also introduced policies to stimulate consumer consumption and purchases.
In a decision to stimulate purchases on its platforms Tmall and Taobao, Alibaba has extended a partnership with Rednote, or Xiaohongshu, an Instagram type service in China. The agreement allows Taobao links to be integrated into Rednote publications, so that users can be taken directly to a product purchase page.
On Thursday, when calling on the results, Alibaba Management said that the company would invest “aggressively” in its so-called “instant trade” model. This is a characteristic introduced on Taobao this month which provides deliveries of certain products in China within the hour, highlighting Alibaba’s candidacy to continue to differentiate itself from its competitors.
Alibaba leaders said hope is that it would lead to more commitment to the Taobao application.
Even with these changes, Alibaba faces an intense price war in China with competitors, including PDD and JD.com.
Cloud growth accelerates
Alibaba said clouds totaled 30.1 billion yuan in the March quarter, increasing at an annual sliding pace of 18% – faster than the growth observed in the previous quarter.
The company said it was motivated by “faster growth in cloud income” and “increase the adoption of AI -related products”.
Investors also focus on Alibaba’s efforts in artificial intelligence, where he has become a leading player at the national and global level.
In April, the company whose headquarters are Hangzhou launched the latest version of its large open source language model, Qwen 3, which is used to supply the Quark Aibaba Ai Aibaba.
IA competition in China is hot red and has been exacerbated by the innovative Deepseek model launched earlier this year. The Chinese technology giant, Tencent, announced on Tuesday an increase of 91% in annual sliding of capital expenditure in the first quarter, driven by investments in AI.
Alibaba CEO Eddie Wu said profits that revenues of AI products had obtained “three -digit growth for the seventh trimester consecutive” in a statement. Wu did not specify any figure to ai-RExalled income.
When calling on Thursday, WU said that companies were traveling to AI -based AI services. He said the company sees a “significant growth route for income” for Alibaba’s cloud activities for the next quarters.
“We have a fairly strong confidence and conviction in this,” said WU, according to a company has provided a live translation of its comments.
