Alibaba Slumps 3.61% with $1.84B Trading Volume Ranking 34th Amid Strategic Shifts and AI Push

On August 14, 2025, Alibaba Group (BABA) fell 3.61% to a closing price, with a trading volume of $1.84 billion, ranking 34th in market activity. The decline followed strategic shifts and competitive pressures in its core sectors. Alibaba announced the shutdown of its Costco-like retail chain Hema X, signaling a retreat from physical retail expansion amid intensified rivalry with rivals. Simultaneously, the company launched a loyalty program integrating shopping and travel services, aiming to boost user retention and cross-platform engagement. These moves reflect ongoing efforts to adapt to evolving consumer behaviors and market dynamics.

Alibaba unveiled an AI-powered agent designed to streamline online sourcing for merchants, a development positioned to enhance operational efficiency in its e-commerce ecosystem. The tool leverages the Qwen model for practical applications, including navigation and trip planning, underscoring the company’s focus on AI-driven innovation. However, talent poaching from its Tongyi Lab, including key researchers, highlights challenges in retaining expertise amid fierce competition in China’s AI sector. The departure of senior figures could impact the pace of technological advancements and investor confidence.

The company also faced regulatory scrutiny in Hong Kong, where authorities investigated ride-hailing fraud linked to personal information misuse. While not directly tied to Alibaba’s operations, the broader regulatory environment in the region may influence market sentiment for tech firms. Additionally, Alibaba’s recent price wars with Meituan over delivery subsidies—marked by free drinks and discounted services—have intensified sector competition, raising concerns over margin pressures and sustainability of aggressive promotional strategies.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered moderate returns. The 1-day return was 0.98%, with a total return of 31.52% over 365 days. This indicates the strategy captured some short-term momentum but also reflected market volatility and potential timing risks.