Alibaba Group Holding reported weaker-than-expected financial results for the June 2024 quarter, reflecting the challenges posed by a slowing Chinese economy and increasing competition within its core e-commerce business. The company’s revenue rose 4% year on year to 243.24 billion yuan ($34.01 billion), falling short of the 249.05 billion yuan analysts had anticipated. Net income declined 29% to 24.27 billion yuan, also missing expectations, as Alibaba cited reduced income from operations and higher impairment charges related to its investments.
The subdued performance underscores the headwinds facing Alibaba as it contends with cautious consumer spending in China and heightened rivalry from companies like JD.com and PDD Holdings’ Temu. These challenges have put pressure on Alibaba’s domestic e-commerce arm, where revenue dropped 1% year on year to 113.37 billion yuan. Despite this decline, the company emphasized that its Taobao and Tmall platforms experienced double-digit growth in gross merchandise value, suggesting increased activity even as overall revenue remained constrained.
Alibaba’s international e-commerce division provided a brighter spot in the earnings report, with revenue surging 32% year on year. The company’s cloud computing segment, another critical area of focus, saw revenue grow 6% to 26.5 billion yuan, driven by increased adoption of AI-related products. This marks the fastest growth rate for the cloud division since the June quarter of 2022, as Alibaba continues to invest heavily in artificial intelligence.
The company’s leadership has been working to steer its core e-commerce business back to growth, particularly by shifting its focus toward third-party merchants on its platforms and introducing new monetization tools. However, the overall economic environment and competitive pressures have made this a challenging endeavor.
