Alibaba Earnings Preview: E-commerce Business Boosts Profit, Cloud Services Shine

• Key Points for Alibaba's Performance:
• E-commerce Business: Following the recovery of the e-commerce market, software service fees and site-wide promotions are enhancing profitability.

As a leading player in China's e-commerce sector, Alibaba's performance is closely tied to the overall market trends. Data shows that in Q2 of this year, domestic retail consumption saw a slight increase. The year-on-year growth rates for retail sales of consumer goods in April, May, and June were 2.3%, 3.7%, and 2.0%, respectively, forming the foundation of Alibaba's performance.

During the 618 shopping festival, Alibaba performed well, with Taobao and Tmall's GMV achieving double-digit growth. 365 brands on Tmall achieved transaction volumes exceeding 100 million yuan, while over 36,000 brands saw their transaction volumes double.

In terms of profitability, Alibaba is reportedly planning to charge merchants for basic software services and steadily advancing site-wide promotional advertisements, which is expected to enhance its profitability.

• International E-commerce Business: Maintaining Rapid Growth Momentum, Lazada Achieves Positive EBITDA for the First Time

As domestic internet growth peaks, major players are looking overseas, and Alibaba is no exception, having early on established a presence in Southeast Asian e-commerce.

In July this year, Alibaba’s Southeast Asian e-commerce subsidiary Lazada achieved positive EBITDA for the first time, marking a milestone achievement.

However, with many competitors in the international e-commerce space, Alibaba still faces strong rivals such as Temu and Shein.

• Cloud Business: Paris Olympics Showcases Capabilities, Price Cuts Yield Significant Results

As the only domestic cloud service provider capable of competing with major U.S. tech giants, Alibaba Cloud’s strength is notable. At the Paris Olympics, cloud broadcasting surpassed satellite broadcasting for the first time, with Alibaba Cloud serving as the exclusive cloud service provider.

Alibaba’s technical capabilities are robust. By the end of May this year, over 90,000 enterprises were using Alibaba Cloud services, with applications spanning various sectors such as automotive, aviation, mining, education, healthcare, catering, gaming, and cultural tourism.

On May 21, Alibaba Cloud announced significant price cuts for nine of its Tongyi commercial and open-source models. The price reductions have been effective in capturing market share, with several AWS customers opting to migrate to Alibaba Cloud despite facing penalties.

Plans for September: Dual Main Listing on Hong Kong Stock Exchange and Rapid Inclusion in Stock Connect

Alibaba's planned dual main listing in Hong Kong will be a significant milestone, with the process expected to be completed in September. Once achieved, the company’s stock could be quickly included in the Stock Connect program, enhancing its international market influence and attracting more investor attention.