Alibaba's E-Commerce Business Sees Strong Growth After Restructuring

Alibaba's core e-commerce business is showing strong growth after restructuring, according to Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies. Alibaba's AI capabilities are also driving success in the company's e-commerce platform.

Alibaba Group Holding Ltd. reported a robust performance in its Q1 2025 earnings, with a 2% increase in total revenue, driven by a 10% growth in domestic e-commerce revenue, a 19% increase in international e-commerce revenue, and a 26% surge in cloud intelligence revenue [2]. Notably, AI-related cloud revenue grew at triple-digit rates for the eighth consecutive quarter.

The company's core e-commerce business, which includes platforms like Taobao and Tmall, has shown strong growth after restructuring, as noted by Jacob Cooke, co-founder and CEO of WPIC Marketing + Technologies. Alibaba's AI capabilities are a significant driver of this success, enhancing the company's e-commerce platform and user experience.

Alibaba's AI-driven initiatives are also bolstering its cloud computing division. The Cloud Intelligence Group reported a 26% year-over-year revenue increase to 33.4 billion yuan ($4.67 billion) in Q1 2026, supported by a three-year, 380 billion yuan ($53 billion) investment plan to transform Alibaba Cloud into a high-margin infrastructure leader [3]. This investment plan includes the development of open-source models like Qwen3 and in-house AI chips, aiming to reduce foreign tech reliance and counter U.S. export restrictions.

However, the company faces stiff competition from rivals like JD.com and PDD, which are leveraging government-backed strategies and cost-cutting measures to gain market share. Additionally, regulatory risks, including the EU AI Act and U.S. semiconductor controls, challenge Alibaba’s global expansion and compliance costs.

Despite these challenges, Alibaba's strategic pivot towards AI and cloud computing is seen as a long-term growth opportunity. The company's significant investments in AI infrastructure and AI product research and development have begun to yield tangible results, with cloud revenue surging 26% to 33.4 billion yuan (US$4.67 billion) [2]. Investors will be closely watching Alibaba's ability to balance AI innovation with financial discipline as it navigates these challenges.

References:
[1] Alibaba Group Holding Ltd. Q1 2025 Earnings Report
[2] Alibaba Group Holding Ltd. Q1 2025 Earnings Report
[3] Alibaba Group Holding Ltd. Q1 2026 Earnings Report