Alibaba Group is consolidating its major ecommerce platforms into a single consumer infrastructure while accelerating its use of artificial intelligence (AI) to drive growth and efficiency.
The move comes as the Chinese tech giant posted stronger profits but only modest revenue growth in its fiscal first quarter.
For the quarter ending June 30, Alibaba reported revenue of RMB247.65 billion (US$34.57 billion), up 2% from RMB243.24 billion a year earlier. Excluding divested businesses such as Sun Art and Intime, revenue rose 10% year over year. That reflects gains in both Alibaba’s domestic and international ecommerce operations. Net income jumped 76% to RMB42.38 billion (US$5.92 billion), bolstered by investment gains and the sale of its Trendyol consumer services unit. Operating profit slipped 3% to RMB34.99 billion (US$4.88 billion) as the company increased spending on its Taobao Instant Commerce quick-delivery service, user acquisition, and technology upgrades.
“This quarter, we delivered solid growth,” CEO Yongming Wu said during Alibaba’s earnings call. “Customer management revenue from our China ecommerce business rose 10% year over year. Cloud Intelligence Group revenue growth accelerated to 26%, with AI-related product revenue maintaining triple-digit growth for the eighth consecutive quarter.”
Alibaba owns the world’s two largest online marketplaces by gross merchandise value (GMV), Taobao and Tmall. Taobao ranks No. 1 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of the largest such marketplaces by GMV. Tmall ranks No. 2. Both platforms operate in China and primarily serve the Chinese market. Among Alibaba’s other marketplaces is the global B2B marketplace Alibaba.com.
How Alibaba is using AI to grow ecommerce revenue
Wu underscored the expanding role of AI in Alibaba’s ecommerce operations. AI-related revenue now accounts for more than 20% of external customer revenue, he said, while AI applications are boosting growth in traditional products such as computing and storage.
Alibaba has upgraded its Qwen3 AI foundation model, including reasoning, coding, and nonthinking variants. It also has open-sourced several models to help customers build AI applications. Consumer-facing applications are also benefiting from AI.
“Amap has undergone a comprehensive AI transformation with the launch of Amap 2025, the world’s first AI-native location-based application. DingTalk has completed its latest AI upgrade, creating the world’s first agent-driven work feed,” Wu said. “On Taobao, we see significant AI-powered opportunities, including AI search and an AI advertising platform.”
Alibaba has merged Taobao, Tmall, Ele.me, and Fliggy into the newly formed Alibaba China ECommerce Group, consolidating supply chains, user bases, and membership benefits. The move also introduced a tiered loyalty program spanning Ele.me, Fliggy, and Amap.
“This is not simply an organizational change; it’s a major strategic investment aimed at redefining the consumer experience and unlocking long-term value across our ecosystem,” said Hong Xu, Alibaba’s head of strategy.
Investments in quick commerce have accelerated, with monthly active users on the segment approaching 300 million in August, helping drive a 25% increase in monthly active users on the Taobao app.
Looking ahead, Wu said Alibaba will continue investing in AI and its consumption platforms.
“Over the next three years, we will focus on strategic investments in consumption and AI + Cloud to sharpen our competitive edge and fuel long-term growth,” he said.
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