Chinese tech giant Alibaba has reported a sharp decline in its core profitability during the March quarter, due to heavy investments in technology and e-commerce, even as the company’s CEO, Eddie Wu, highlighted growth in AI revenue.
Its aIts adjusted EBITA was 5.1 billion Chinese yuan ($750.9 million), an 84% decline year-on-year.
Adjusted EBITA for Alibaba’s China e-commerce group fell 40% year-on-year, even as customer management revenue increased by 1%.
Alibaba’s quick commerce revenue rose by 57% year-over-year. Meanwhile, Alibaba’s total China e-commerce revenue increased by 6% year-over-year in the March quarter.
In a press release, Eddie Wu, Chief Executive Officer of Alibaba Group, told investors: “Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale. This quarter, we achieved accelerated breakthroughs across models, cloud infrastructure, and applications. Cloud Intelligence Group’s external revenue growth accelerated to 40%, with AI-related products accounting for 30% of this revenue. Our Qwen LLM demonstrated leadership in reasoning and coding while we strengthened our multimodal model portfolio with the launch of video generation and world models. As we see massive potential for agentic AI, we launched multiple enterprise AI agents for office and coding use cases, and we fully integrated e-commerce capabilities into the consumer-facing Qwen app, deepening synergies between AI and our consumer ecosystem.”
“Our strategic investments continued to translate into business growth. Cloud Intelligence Group’s revenue continued to accelerate, with AI-related product revenue achieving triple-digit growth for the eleventh consecutive quarter. China e-commerce customer management revenue grew 8% on a like-for-like basis. The unit economics and average order value of quick commerce steadily improved. We are confident in our business outlook and will continue to invest in AI + Cloud to strengthen our competitive advantages,” said Toby Xu, Chief Financial Officer of Alibaba Group.
Alibaba’s U.S.-listed shares fell 4% following the announcement.
By CEO NA Editorial Staff
