E-Commerce Boom and AI Surge Propel Alibaba to Record Q3 Earnings

Alibaba Group just announced its latest quarterly results, and this report shows the Chinese e-commerce titan just had another great performance: its e-commerce business shows accelerated growth, its Cloud's commercial revenue returned to double-digit growth, and its AI-related product revenue also maintained triple-digit growth for six consecutive quarters.

In the December quarter, Alibaba achieved revenue of 280.15 billion RMB, surpassing the estimated 277.37 billion RMB, and marked an 8% year-on-year increase. Net income was 46.434 billion RMB, a 333% increase year-on-year. Adjusted EBITDA was 62.05 billion RMB, and adjusted earnings per ADS were 21.39 RMB, a 13% increase year-on-year.

This quarter's results demonstrated substantial progress in our 'user first, AI-driven' strategies and the re-accelerated growth of our core businesses, said Alibaba CEO Eddie Wu in a statement accompanying the results.

Our Cloud revenue growth reignited to double digits at 13%, with AI-related product revenue achieving triple-digit growth for the sixth consecutive quarter. Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate.

AI + Cloud Becomes New Engine

At the dawn of a new technological cycle, AI is poised to become a new growth engine for Alibaba's future.

Alibaba Cloud adheres to the integrated development of AI + Cloud, with AI continuously injecting new momentum into cloud business growth. With the rapid application of AI across various industries, customer demand for Alibaba Cloud has grown rapidly. This quarter, Alibaba Cloud revenue returned to double-digit growth at 13% year-on-year, with AI-related product revenue achieving triple-digit growth for six consecutive quarters.

In January this year, Alibaba open-sourced the new generation multimodal model Qwen2.5-VL and launched the flagship model Qwen2.5-Max based on the MoE architecture, achieving leading positions in multiple authoritative benchmark evaluations. The Tongyi Qianwen Qwen model family has become one of the largest AI model families globally. As of January 31, 2025, the number of derivative models developed based on the Qwen model family on Hugging Face has exceeded 90,000.

Alibaba Cloud has built a full-stack system from large AI models to cloud computing platforms to open-source ecosystems and will continue to invest in AI infrastructure to enhance cloud adoption in the AI field and maintain market leadership. In the future, as AI efficiency improvements lead to demand explosions, AI will continue to drive Alibaba Cloud's revenue growth.

E-commerce Fully Recovers, International Digital Commerce Revenue Increases by 32%

Alibaba's e-commerce continues to execute the user-first strategy, continuously improving user experience and enhancing the business environment for merchants, achieving significant results this quarter, with the business fully recovering.

The financial report shows that Taobao and Tmall Group have increased investment in user growth and continuously invested in user experience improvement, with quarterly new buyers and order volume both showing strong year-on-year growth. The core user group of 88VIP continues to grow at a double-digit rate year-on-year, reaching approximately 49 million.

Thanks to the effectiveness of commercialization initiatives, Taobao and Tmall Group's quarterly CMR accelerated to 9% year-on-year. The penetration rate of full-site promotion among merchants has steadily increased, especially among small and medium-sized merchants, benefiting from improved marketing efficiency. At the same time, Taotian has launched a series of merchant-friendly initiatives, increasing support for high-quality brand merchants, improving the business environment for merchants, promoting sustainable development of platform merchants, and achieving a win-win situation for consumers, merchants, and the platform.

Driven by strong performance in cross-border business, this quarter's international digital commerce revenue grew rapidly by 32% year-on-year. While increasing investment in key overseas markets, it also continues to balance operational efficiency. This quarter, the unit economic benefits of AliExpress Choice's business improved sequentially.

While core businesses accelerated growth, the operational efficiency of other Internet platform businesses steadily improved. This quarter, Local Living Group revenue increased by 12% year-on-year, with losses significantly narrowing year-on-year. Digital Media and Entertainment Group revenue increased by 8% year-on-year, with losses continuing to narrow. At the same time, Alibaba further focused on core businesses, signing agreements to sell equity in Intime and RT-Mart within the quarter. In the 2024 calendar year, Alibaba has repurchased over 100 billion RMB, leading among Chinese concept stocks, continuously enhancing shareholder returns.

Analysis points out that over the past year, Alibaba's proactive reforms have achieved significant results. After completing weight reduction and focus, it will better focus on technology and consumption in the new development stage. With the advent of a new technological cycle driven by AI, Alibaba is expected to continue releasing new growth potential.