Alibaba’s earnings fell short of expectations despite accelerating cloud computing business, and its stock price fell 4% pre-market

Alibaba The company’s core e-commerce business continued to face headwinds due to increased competition and cautious Chinese consumers, resulting in it missing revenue and profit expectations for the June 2024 quarter.

Alibaba shares fell about 3.99% at 7:14 a.m. in U.S. pre-market trading.

Here’s how Alibaba’s June quarter results performed compared with London Stock Exchange estimates:

• Revenue: RMB 243.24 billion (US$34.01 billion), vs. RMB 249.05 billion expected.
• Net income: RMB 24.27 billion, expected to be RMB 26.91 billion.

Revenue increased 4% year-on-year, while net profit fell 29%. Alibaba said the decline in net profit was “primarily due to lower operating income” and “increased impairment” of investments.

Alibaba has been looking to revive growth after a turbulent 2023, when it launched its largest-ever Corporate structure reformThe company then underwent a high-profile management change, with Eddie Wu taking over as CEO in September.

The e-commerce giant has been grappling with cautious Chinese consumers and growing competition from: JD.com and Temu Owner Quota Allocation.

Since taking over, Wu has been working to get Alibaba’s core Chinese e-commerce business back on its feet as the company undergoes a transformation to focus more on third-party merchants selling in China through its platforms, Taobao and Tmall, while relying less on direct sales.

Wu Jihan previously said the company intends to launch new monetization features for its e-commerce platform, which will enable Taobao and Tmall businesses to return to growth in the second half of 2025.

In the June quarter, Taobao and Tmall Group sales, which represent Alibaba’s Chinese e-commerce business, fell 1% year-on-year to 113.37 billion yuan.

Alibaba said its Taobao and Tmall businesses achieved “double-digit” growth in gross merchandise volume – a figure that represents the value of transactions across the platforms. Alibaba has been keen to stress that shoppers are still using its sites even as overall revenue remains weak.

At the same time, Alibaba’s overseas online shopping businesses such as Lazada and Aliexpress continued to be bright spots, with sales of the international e-commerce department increasing by 32% year-on-year.

company Last year, the management of the cloud computing department was greatly adjusted. The cloud unit’s adjusted earnings before interest, taxes, amortization, and depreciation (EBITA), a profitability metric, grew 155% year-over-year in the June quarter, according to the company.