Alibaba, the Chinese e-commerce giant, fell short of both revenue and net income expectations for the June quarter of 2024. The company reported revenue of 243.24 billion Chinese yuan, missing the expected 249.05 billion yuan. Similarly, net income stood at 24.27 billion yuan, lower than the estimated 26.91 billion yuan. The revenue was up by only 4% year-on-year, while net income saw a significant drop of 29% year-on-year.
Alibaba attributed the decline in net income to a decrease in income from operations and an increase in impairment from its investments. The company has been grappling with a cautious Chinese consumer market and stiff competition from rivals like JD.com and PDD. The challenges faced by Alibaba were further exacerbated by a restructuring in 2023, which was accompanied by top management changes, including Eddie Wu taking over as the CEO in September.
In an effort to reignite growth, Eddie Wu has been focusing on stabilizing Alibaba’s core China e-commerce business. The company is shifting its strategy towards third-party merchants selling on platforms like Taobao and Tmall in China, reducing its reliance on direct sales. Wu has also expressed intentions to introduce new monetization features that would drive growth for Taobao and Tmall in the latter half of 2025.
During the June quarter, sales from the Taobao and Tmall group, representing Alibaba’s China e-commerce business, saw a 1% year-on-year decline to 113.37 billion yuan. However, Alibaba’s overseas online shopping divisions, including Lazada and AliExpress, showed strong performance with a 32% year-on-year increase in sales in the international e-commerce segment.
Alibaba’s disappointing results for the June quarter of 2024 underscore the challenges faced by the company in a competitive and cautious market environment. Despite the setbacks, Alibaba remains committed to finding new avenues for growth and is actively working towards revitalizing its core e-commerce business in China.