Two takeaways from Alibaba’s latest earnings—which paint a clear picture of where China’s economy is heading.
First, Alibaba remains China’s most dominant e-commerce player, with revenue from the China e-commerce division up 16%. One growth driver has been instant commerce, which Alibaba projects will add US$140+ billion over the next three years, given the flywheel effects of bringing more shoppers onto the Taobao/Tmall app. Instant commerce is a costly battleground across the industry (as reflected in the profit dip this quarter), but Alibaba’s scale and integrated ecosystem are giving it an advantage over incumbent Meituan. Cost per order in one-hour delivery has also fallen by half since summer. Continue to watch instant commerce as a growth driver.
China’s Singles’ Day period also showed solid demand, with Alibaba posting it’s best sales growth in four years—evidence that consumption remains resilient, especially in categories where quality and trust matter most.
My second takeaway from the earnings—which is another reason for Alibaba’s e-commerce performance—is that Alibaba has become a global AI heavyweight.
Cloud revenue surged 34% YoY, powered by explosive demand for enterprise AI services. At the same time, Alibaba has made a major push into consumer AI, with a major rollout of AI across its e-commerce platforms and the launch of the Qwen AI app, which surpassed 10M downloads in its first week.
With massive investments underway and more slated for the future, Alibaba is betting that winning the future of e-commerce requires winning AI—both behind the scenes (infrastructure, models, cloud) and on the consumer-facing layer (assistants, agents, conversational commerce).
From where we sit at WPIC, these investments matter for global brands because they’re transforming how consumers discover products, how merchants operate, and how platforms allocate traffic. The shift toward AI-driven personalization and faster fulfillment already contributed toward a more efficient Singles’ Day and will continue to drive growth.
With these big investments, Alibaba had a short term hit to margins, but this is exactly what Alibaba needs to do to compete in the next phase of China’s platform landscape. With US$41 billion in cash, Alibaba is operating from a position of strength. And the market reaction tells the real story: investors are looking past near-term margin pressure and toward the long-term structural bets being made.
