📉 Revenue Growth and Missed Estimates
In the June quarter, Alibaba's revenue rose 4% to $34B, missing analysts’ expectations. The growth was slower than the previous quarter's 7%. Despite the increase, profits plunged 29% to $3.3B, well below the predicted $4.2B. The slowdown is linked to a weaker economy and tough competition from rivals like Pinduoduo and Douyin.
☁️ Cloud Services and E-commerce Focus
Alibaba's cloud computing revenue rose 6% to $3.7B, supported by its role as the online broadcaster for the 2024 Paris Olympics. CEO Eddie Wu highlighted that AI-related products and public cloud services drove this growth. Meanwhile, the core e-commerce unit, including Taobao and Tmall, saw a 1% revenue decline to $15.8B, as Alibaba works to regain market share.
📊 Strategic Shifts and Future Outlook
Under its largest restructuring in 25 years, Alibaba is doubling down on e-commerce and cloud services. Wu promised that the cloud business would return to double-digit growth by March 2025. Alibaba is also investing in AI technology and start-ups, aiming to strengthen its position in this fast-growing sector.
🌍 International Expansion and Challenges
Alibaba's international commerce unit reported a 32% revenue surge to $4B, with Lazada turning its first monthly profit in July. Despite global competition, Alibaba’s strategy to improve operational efficiency and brand awareness is paying off, particularly in markets like Southeast Asia. The company's shares, however, fell 2.4% on the Hong Kong stock exchange.
How should Alibaba navigate its future amid challenges?
