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LATEST NEWS

Marijan Hassan - Tech Journalist

Alibaba beats profit expectations despite sluggish sales growth


Chinese e-commerce giant Alibaba reported better-than-expected profits for the September quarter, but its revenue came in slightly below analysts’ forecasts as China’s slow economic recovery weighed on consumer spending.



Alibaba’s net income rose an impressive 58% year-on-year to 43.9 billion yuan ($6.07 billion), far surpassing the 25.83 billion yuan forecasted by analysts. The profit boost was largely driven by gains from equity investments and lower impairment charges.


“The year-over-year increases were primarily attributable to the mark-to-market changes from our equity investments, decrease in impairment of our investments, and increase in income from operations,” the company stated.


Revenue for the quarter reached 236.5 billion yuan ($32.68 billion), up 5% from the previous year but slightly below the anticipated 238.9 billion yuan. While the company’s core e-commerce businesses — Taobao and Tmall — showed modest growth of 1% to 98.99 billion yuan, the results reflect the challenges facing China’s retail market.


This performance follows a pattern of lackluster earnings from Chinese commerce businesses, with rival JD.com also missing revenue expectations earlier this week.


Cloud Business Shines

Alibaba’s Cloud Intelligence Group posted a 7% year-on-year growth in sales to 29.6 billion yuan, slightly accelerating from the prior quarter’s 6% growth. The cloud division’s focus on artificial intelligence (AI) is paying off, with revenues from AI-related products growing at triple-digit rates.


“Growth in our Cloud business accelerated from prior quarters, with revenues from public cloud products growing in double digits and AI-related product revenue delivering triple-digit growth,” said Alibaba CEO Eddie Wu.


The cloud unit has been positioned as a future growth driver for Alibaba, stepping up competition with domestic rivals like Baidu and Huawei, as well as global players such as Microsoft and OpenAI. The company has been aggressively investing in AI, rolling out its own ChatGPT-style product, Tongyi Qianwen, and launching an AI-powered search tool for small businesses in Europe and the Americas.


Stock Reaction

Despite the profit beat, Alibaba’s shares fell over 2% in morning trading on Friday, reflecting investor concerns about the revenue miss and broader economic headwinds.


Looking Ahead

Alibaba’s outlook remains closely tied to the trajectory of the Chinese economy. While its investments in AI and international markets signal long-term potential, the company faces near-term challenges from slowing domestic growth and intense competition.

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