Alibaba, China’s largest e-commerce company, reported quarterly revenue that fell short of Wall Street expectations, as it battles intense competition and weakened consumer spending in its home market.
On Thursday, the tech giant announced revenue of 236.45 billion yuan ($32.79 billion) for the fiscal quarter ending March 31—just under analysts’ projection of 237.24 billion yuan. The news triggered a dip in Alibaba’s U.S.-listed shares, which fell over 4% in pre-market trading. Still, the stock has climbed roughly 58% since the beginning of the year.
The disappointing earnings come amid a highly competitive environment in China’s online retail sector. As economic uncertainty and a prolonged real estate slump dampen consumer confidence, Chinese shoppers are increasingly hunting for bargains. This has led to a fierce price war among major players like Alibaba, JD.com, and Pinduoduo.
Alibaba is feeling the pressure as rival JD.com recently outperformed expectations in its Q1 earnings and reported a surge in new user growth.
Both companies are now pivoting aggressively toward “instant retail”—an emerging model that promises delivery times between 30 and 60 minutes. In a bid to dominate this fast-growing niche, platforms have begun rolling out generous coupons and limited-time discounts.
Despite the revenue miss, Alibaba did see strength in key areas. Its Taobao and Tmall Group—the company’s core domestic e-commerce business—grew by nearly 9% year-over-year. This growth was attributed to higher order volumes and strong traction among new shoppers, according to the company’s earnings statement.
Investors and analysts are now eyeing China’s massive “618” shopping festival, which culminates on June 18. It’s one of the largest e-commerce events of the year, and early pre-sales are already underway. How Alibaba performs during this sales window could be a crucial indicator of whether its strategic shifts are working.
Beyond retail, Alibaba is also making major investments in artificial intelligence. In April, it unveiled Qwen 3, the latest version of its proprietary AI model, featuring advanced hybrid reasoning capabilities. This move reinforces Alibaba’s ambition to lead China’s rapidly evolving AI space.
Meanwhile, the company’s Cloud Intelligence Unit reported 18% year-over-year growth, pulling in 30.13 billion yuan. This unit is becoming increasingly important as Alibaba diversifies beyond retail.
While Alibaba’s revenue slipped below expectations this quarter, its solid gains in AI and cloud computing, as well as ongoing innovation in logistics and e-commerce, suggest the company is adapting to the new economic landscape—even as the battle for market share intensifies.
