By Harshita Mary Varghese and Casey Hall
(Reuters) – Alibaba on Thursday reported third-quarter revenues just above analysts’ estimates on strong year-end sales, showing that the e-commerce group’s strategy to attract cost-conscious consumers has helped to revive its performance.
U.S.-listed shares of the company were up about 8% in premarket trading.
Chinese retailers such as Alibaba have cut prices and intensified promotional offers to revitalise consumer spending and drive sales at their core domestic e-commerce businesses.
Healthy demand from international markets and increased spending by customers towards the year-end helped the company boost sales.
The company’s revenue was 280.15 billion yuan ($38.58 billion) for the three months ended December 31, compared with 279.34 billion yuan expected by 17 analysts polled by LSEG.
China’s annual Singles’ Day sales event, a nationwide shopping festival in October and November, often viewed as a barometer of consumer sentiment, ran longer than previous editions and led to a 26.6% rise in sales in major e-commerce platforms, according to data provider Syntun.
Alibaba said 45 brands – including Apple and Xiaomi – surpassed 1 billion yuan in gross merchandising value, a commonly used measurement for online sales, during the Singles’ Day sales period.
‘AI JUGGERNAUT’
Alibaba has kicked off 2025 as a winner in China’s AI race, drawing in investors with strategic business wins. Its share price has risen more than 40% since the beginning of the year.
“Alibaba has bagged a seat on the AI juggernaut and is now reaping rewards … it’s what is going on under the bonnet in terms of AI which is really moving the dial,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“Alibaba has carved out a significant niche in the rapidly expanding world of cloud-computing, providing the backbone for AI operations,” she added.
Alibaba’s Cloud Intelligence Unit’s revenue grew 13%.
Alibaba’s domestic e-commerce business Taobao and Tmall Group produced revenue growth of 5% for the quarter.
That was outpaced by 32% revenue growth in the company’s international e-commerce division, which includes cross-border player AliExpress, wholesale B2B site Alibaba.com and other regional platforms.
Alibaba last November announced the integration of its domestic Chinese and international e-commerce platforms into a single business unit, the Alibaba E-commerce Business Group, bringing together the Taobao and Tmall Group and the Alibaba International Digital Commerce Group.
The inclusion of Alibaba co-founder Jack Ma in a meeting of private enterprise leaders chaired by China’s President Xi Jinping this month, and photos of Ma shaking hands with Xi, has further raised investor confidence in Alibaba.
Alibaba said it is teaming up with Apple to power iPhones sold in China with its AI solutions, solidifying its foothold in a market where homegrown rival DeepSeek is making waves with cost-effective models.
Alibaba unveiled an upgraded version of its Qwen 2.5 AI model in late January, saying it outperforms DeepSeek-V3.
($1 = 7.2613 Chinese yuan renminbi)
(Reporting by Harshita Mary Varghese in Bengaluru and Casey Hall in Shanghai; Editing by Arun Koyyur and Jane Merriman)
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