Alibaba growth slows as China turns to competitors

Alibaba managed only 5 % revenue growth in the last quarter of 2023, but the Chinese e-commerce giant still calls that “solid”. Star of the show was AliExpress, with 60 % more packages.

Revitalise

CEO Eddie Wu still spoke of “a solid quarter”, but he admits to the need to revitalise the core e-commerce and cloud computing businesses. Wu plans to further boost investment to reinforce Alibaba’s market leadership – a hefty challenge given the growing competition from challengers such as Temu owner Pinduoduo.

Especially in China itself, there is work to be done: Alibaba is shaking up Taobao and Tmall, following a major reorganisation last year. Sales on the Chinese platforms rose just 2 % to the equivalent of 16.8 billion euros. The number of buyers and order volume rose sharply, but the average order value fell.

Increasing global demand

In contrast, sales abroad rose 44 % to 3.72 billion euros, helped by 24 % more combined orders. AliExpress, which mainly targets Western consumers, received as much as 60 % more orders since Choice was introduced: for a selection of products, customers now get faster delivery. Alibaba explains the growth pointing to the increasing global demand for low-cost products,

Overall, the group reported revenue growth of 5 % in the quarter to 31 December, accounting for nearly 34 billion euros. However, operating profit slumped 36 % to less than three million euros. The drop is mainly due to impairments on hypermarket chain Sun Art and on video platform Youku, which is lagging behind rivals.