On Monday, 1 September, Chinese e-commerce and tech goliath Alibaba saw its share prices soar nearly 13%, pushing its market value to 321.85 billion USD, its biggest increase since 2022. The reason, of course, is that on the same day, Alibaba released its quarterly financial report for Q1 FY2025-2026, for the 3 months that ended on 30 June.
Alibaba’s total revenue reached 247.65 billion RMB (34,73 billion USD), up 2% year-on-year (YoY), while net profit was 42.38 billion RMB (5.94 billion USD), a 76% YoY jump, both exceeding market expectations.
All core businesses performed well in the quarter. Alibaba Cloud, the cloud and AI services branch of the tech giant, experienced a 26% YoY growth, marking a 3-year high. Revenue from AI-related products saw its 8th consecutive quarter of triple-digit growth.
The quarterly results reflect the group’s recent major restructuring. The “China e-commerce” division increased revenue by 10% to 140 billion RMB (19.63 billion USD), while the digital global commerce group earned 34.74 billion RMB (4.87 billion USD), up 19% YoY.
However, according to Alibaba, the quarterly profit dropped 18% compared to 2024, due to the price war of attrition in the food delivery and “local life” services market with JD.com and Meituan, as well as expenditure on AI infrastructure.
Defying expectations, Alibaba’s profit was impacted less compared to JD and Meituan, and the group is doubling down on its “instant retail” services through Taobao’s “Flash Buy” (淘宝闪购). It seems that the market agrees with Alibaba’s strategy and is also investing in the group.
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