Alibaba Group Holding’s third-quarter revenue fell short of analysts’ expectations, attributed to a challenging retail environment and a slow economic rebound in China. This resulted in a 4 percent decline in its US-listed shares in early trading. To counteract this, Alibaba announced an additional $25 billion expansion of its share repurchase program, extending through March 2027.
The company faces competition from lower-cost domestic e-commerce rivals, such as PDD Holdings, as consumer spending in China decreases. In response, Alibaba underwent a business restructuring last March, creating six units to enhance focus and efficiency, with CEO Eddie Wu emphasizing the revitalization of their core e-commerce and cloud computing services.
Despite these efforts, Alibaba’s profit significantly declined, with net income for ordinary shareholders at 14.4 billion yuan ($2 billion), a 77 percent drop largely due to valuation changes in investments. Notably, revenue from Alibaba’s flagship platforms Taobao and Tmall grew by a mere 2 percent, even with high-profile sales events like Singles Day.
Alibaba’s rivalry with PDD Holdings intensified as the latter surpassed it in market valuation due to concerns over Alibaba’s slower recovery in its cloud business. Moreover, Alibaba halted plans to spin off its cloud business amidst worries over US export limitations to China.
Confronted with tough market conditions, Alibaba remains cautious about the immediate IPO prospects for its logistics arm Cainiao and its grocery business Freshippo, despite rumors of potential asset sales in the consumer sector, including Freshippo.
Alibaba’s International Digital Commerce segment showed promise, with a significant increase in AliExpress orders. This optimism was echoed by AIDC’s chief executive, Jiang Fan, highlighting potential growth opportunities in various markets.
