Alibaba recently reported its financial results for the June quarter of 2024, and the numbers fell short of expectations set by LSEG. The company’s revenue came in at 243.24 billion Chinese yuan ($34.01 billion), missing the 249.05 billion yuan expected. Similarly, Alibaba’s net income was 24.27 billion yuan, below the 26.91 billion yuan estimated. This disappointing performance sent Alibaba’s shares tumbling around 3.49% in premarket trade in the U.S.
Alibaba continues to face challenges in its core e-commerce business, with rising competition and a cautious Chinese consumer impacting its growth. Despite a 4% year-on-year increase in revenue, the company saw a significant 29% drop in net income. Alibaba attributed this decline to a decrease in income from operations and an increase in impairment from its investments.
After a tumultuous 2023, which saw Alibaba undergoing a major corporate restructuring and changing top management, the company has been focused on reigniting growth. Eddie Wu took over as chief executive in September, with a mandate to stabilize Alibaba’s core China e-commerce business. The company is shifting its strategy to focus more on third-party merchants selling via platforms like Taobao and Tmall in China, while reducing its reliance on direct sales.
While Alibaba’s China e-commerce business struggled in the June quarter, its overseas online shopping businesses, including Lazada and Aliexpress, performed well. Sales in the international e-commerce division were up 32% year-on-year, highlighting a bright spot amidst the overall challenges faced by the company.
Alibaba is optimistic about its future prospects, with plans to introduce new monetization features for its e-commerce platforms in the coming months. CEO Eddie Wu has expressed confidence that these initiatives will drive growth in the latter half of 2025. Investors will be closely watching Alibaba’s progress in the next few quarters to see if the company can overcome its current challenges and return to a path of sustainable growth.