Alibaba misses revenue estimates as it fights for China e-commerce market dominance
Alibaba's rival JD.com beat first-quarter revenue estimates on Tuesday and said it was seeing strong user growth despite the prolonged economic weakness weighing on consumer sentiment.
Chinese shoppers, grappling with a prolonged property crisis and a cloudy economic outlook, have increasingly become cost-conscious, prompting deep discounts and rock-bottom prices to stimulate spending.
That has sparked a price battle among China's largest online e-commerce platforms including Alibaba, PDD Holdings' Pinduoduo and JD.com, as they jostle for market share.
Alibaba's domestic e-commerce business Taobao and Tmall Group produced revenue growth of nearly 9% for the quarter, the group said, attributing this to strong momentum in new consumer growth and a continuing increase in orders.
Chinese e-commerce giants have been aggressively expanding into so-called instant retail, focusing on delivery speeds of 30 to 60 minutes, in their battle for market share.
Both JD.com and Alibaba's platforms have increased incentives to users including coupons to try their expanded instant retail and food delivery offerings.
Alibaba E-commerce Business Group Chief Executive Jiang Fan told analysts on a call that Alibaba would be "investing aggressively" in the instant retail business in the short term.
"One thing to note about this instant retail market is that it's a huge market," he said. "Today, it could be a market of say 500 to 600 million consumers. Going forward, that can easily become 1 billion consumers."
Alibaba's international commerce division (AIDC), which includes cross-border player AliExpress, produced 22% in revenue growth, though that missed forecasts for 26.4% growth.
"International business missed but I'm not sure if it was due to AliExpress suffering from tariff impacts," said M Science analyst Vinci Zhang. "I thought it was interesting that they didn't highlight anything related to the U.S... That to me felt a bit deliberate."
Alibaba Group CEO Eddie Wu acknowledged "uncertainties in global trade regulations" as a potential headwind, though he added that AIDC remained on track to achieve profitability in the coming fiscal year.
Investors are also shifting focus to the "618" festival, one of the biggest annual shopping events in China, which culminates on June 18. Retailers have already started pre-sales.
Alibaba's Cloud Intelligence Unit's revenue grew 18% to 30.13 billion yuan.
The group has emerged as a leader in China's competitive AI race and the tech giant has consistently released new models throughout the year. It launched Qwen 3 in April, an upgraded version of its flagship AI model that introduces new hybrid reasoning capabilities.
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